The U.S. car industry is on the brink of collapse, and companies are facing scorn and scrutiny from consumers, investors and the government. As a result, auto stocks have been squashed, yet one premium-components manufacturer,

Hawk Corp.


, has been spared. Ratings' quantitative model rates 53 auto and car-components stocks, of which the micro-cap Hawk is one of two that has received a "buy" recommendation. In fact, the company was upgraded earlier this month.

Hawk, whose customers include Nascar and the American LeMans Series, is likely to outperform "sell"-rated industry competitors

Wabco Holdings

(WBC) - Get Report


Arvin Meritor




(LEA) - Get Report



(TEN) - Get Report


Hawk's stock has risen 12% in the past three months, exceeding the Amex Composite Index's 7.4% return and bringing the Cleveland-based company's market value to $159 million. Shares of

General Motors

(GM) - Get Report



(F) - Get Report

have dropped 44% and 3% during the same period, respectively.

Hawk's third-quarter net income jumped to $10.26 million from $1.66 million a year earlier. During the most recent quarter, its gross margin widened to 36.3% from 26%, and the operating margin increased to 21.08% from 8.84%. A quick ratio of 3.15 indicates a strong liquidity position. Hawk is trading at a discount relative to its industry peers based on price to earnings and price to sales, but is expensive based on price to book and price to cash flow.

Hawk sells to a diverse group of buyers, and its products are used in aircraft, construction and agricultural vehicles, trucks, motorcycles, race cars and all-terrain vehicles. The company sells to original equipment manufacturers and in the auto-parts aftermarket. That diversification has helped Hawk outperform when its competitors are hurting from the pullback in discretionary spending and the decline of the Big Three.

There are numerous risks facing Hawk. The company has a debt-to-capital ratio of 0.51, indicating sizable leverage. The stock is thinly traded, with average daily volume of 30,000 shares. The company doesn't pay dividends.

CEO Ronald Weinberg purchased 5,000 shares of Hawk's stock on Nov. 25 at an average price of $13.40, following the announcement of a $15 million buyback program. Those two actions bode well for future performance. Hawk has an acquisition strategy and is seeking small companies with exposure to the friction-products market or the fuel-cell industry. The company sold Quarter Master Industries on Dec. 24 for an undisclosed amount.

There are three sell-side analysts covering Hawk, all of whom rate the stock "hold." The company has strong fundamentals and is positioned for long-term success. Consider macroeconomic and idiosyncratic risk before investing.