Construction-equipment manufacturer Manitowoc ( MTW) has earned a buy rating since December 2004. The company has three main markets: cranes, food service equipment, and marine services in the Great Lakes region. Manitowoc boasts a number of strengths, including notable return on equity, robust revenue growth, consistent EPS growth, intriguing increases in net income, and good cash flow from operations. With mainly positive measures across the board, the company's low profit margins are nothing to be overly concerned about.
Welding-equipment maker Lincoln Electric ( LECO) has secured a buy rating since December 2004. The company shows a convergence of positive investment measures, which include a decent return on equity, revenue growth that has outpaced its industry, reasonable debt levels and EPS growth.
Ticking along with a buy rating since December 2004, boutique-jewelry and watchmaker Movado ( MOV) should continue to outperform the majority of stocks we rate, even though the price already has been running above the S&P 500. The company has a wide range of positives, including commendable return on equity and revenue growth that has more than doubled the industry average. Movado also shows reasonable debt levels, attractive valuation levels and displays no major weaknesses to threaten the buy rating in the foreseeable future.
Amphenol ( APH) has earned a buy rating since January 2005 for its successful design, manufacturing and marketing of electronic and fiber-optic equipment. The company's strengths include robust revenue growth, a steady record of EPS improvement and net income growth, and solid cash flow from operations. We believe these strengths outweigh the fact that the company shows low profit margins.
A buy since December 2004, Baldor Electric ( BEZ) designs, manufactures and sells electric motors and drives, speed reducers, industrial grinders, buffers, polishing lathes, stampings, castings and repair parts. Its custom and stock products are sold directly to original equipment manufacturers, as well as to independent distributors for resale.
Flexing its buy rating since October 2006, Tredegar ( TG) manufactures plastic films and aluminum extrusions. The company shows a commendable return on equity, stout revenue growth and reasonable debt levels by most measures. Tredegar's stock appreciated by 73.78% in 2006, making it more expensive than that of its industry peers, but the company's performance justifies its cost. We also believe that the company's strengths will outweigh its low profit margins.
Philadelphia Consolidated Holdings ( PHLY) has secured a buy rating since January 2005. The company designs, markets and underwrites specialty commercial and personal property and casualty insurance products. The positive rating is based on the convergence of a number of positive investment measures, including successful debt management, notable return on equity, a strong gross profit margin and an impressive record of EPS growth. Despite weak operating cash flow, the company's stock price should continue its upward trend.
Carrying a buy rating since December 2004, Martin Marietta Materials ( MLM) provides construction material for infrastructural, commercial and residential uses. Among the company's range of strengths are commendable return on equity, EPS growth, impressive stock-price appreciation and reasonable debt levels by most measures. Martin Marietta's stock price increased 34.26% in 2006, exceeding the S&P 500 and making it relatively more expensive compared to the rest of its industry, but the company's positives justify the higher price.
Casual-accessories and apparel designer Guess? ( GES) has sewn up a buy rating since August 2005. The prominent jeans manufacturer shows a number of strengths, including its notable return on equity, robust revenue growth, reasonable debt levels and compelling net income growth. These positives outweigh the fact that the company's stock is already trading at premium valuation based upon review of its earnings and book value.
A buy since August 2005, Middleby ( MIDD) develops, manufactures, distributes and repairs equipment used for commercial and institutional kitchens and restaurants. The company's strengths include its notable return on equity, compelling growth in net income and a stellar record of EPS improvement. Middleby's revenue growth was more than twice that of the industry average. Growth in the company's revenue appears to have helped boost the earnings per share. These positives outweigh the company's generally lackluster debt management based on most measures we consider.