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

Graham Corp Already Seems To Be Building In Better Days

Investors have seen multiple examples recently that demonstrate how quality industrial companies can bring in buyout offers at valuations above what I believe most analysts would calculate as fair on a stand-alone basis. Over the past three months, Gardner Denver, Edwards Group (NASDAQ:EVAC), and Kaydon (NYSE:KDN) have all accepted deals that I believe fit that pattern.

That brings me to Graham Corp (NYSEMKT:GHM). I love the idea of a company that holds strong market share in engineered-to-order ejectors, condensers, heat exchangers, and pumps, not to mention one that produces good returns on invested capital without overwhelming institutional ownership. On the other hand, shares are up more than 80% over the past year and...

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