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

Quirky Raven Has The Quality, But Not So Much Value

The word quirky probably doesn't do justice to Raven Industries (NASDAQ:RAVN), as this small conglomerate is a leader in such disparate markets as reinforced plastic sheeting, GPS-based controls for agricultural equipment, and high-altitude balloons. While Raven has consistently generated strong returns on capital, the free cash flow hasn't been as consistent or impressive. With meaningful exposure to markets like energy and government and what looks to be a premium valuation, I think investors may do better to wait before making a major commitment to Raven with their own capital.

Three Very Different Plays Under One Roof

As the intro indicated, Raven operates in three non-overlapping businesses - engineered films, "applied technology" (precision-guided controls), and Aerostar. While this a...

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