Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

EnPro: Another Strong Small Industrial With Questionable Value

Small-cap industrials can be a great source of alpha-generating investment ideas. In many cases, investors would rather spend their time on the latest hot tech idea than dive into the nitty-gritty of pumps, bearings, hydraulics and the like. That said, while EnPro (NYSE:NPO) is hardly a household name, it's not immediately obvious that this small industrial components company is significantly undervalued at today's prices.

A Three-Way Industrial Products Play

EnPro has three primary product segments.

Engineered products

The engineered products business focuses on bearings, compressor components, and aluminum blocks for hydraulics. The GGB business is heavily oriented towards OEM applications (about 90% of sales) and Europe (about two-thirds of sales). For GGB, autos, HVAC, pumps, and variety of...

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