Intangible Valuation
Value, contrarian, coat tail rider, idiosyncratic research

NN Inc: A Fully Valued Cyclical

NN Inc. (NASDAQ:NNBR) is a three segment industrial supplier. Its operations are broken down into (1) a metal bearings segment accounting for 68% of sales, (2) a plastics and rubber segment accounting for 11% of sales, and (3) a precision metals segment accounting for 21% of sales.

The products supplied by NN Inc. seem at first glance to be commoditized. Take a look at their products below:

However, a read through the 10-K suggests that NN Inc. has a strong position in its value network and rising costs of raw materials are easily passed through to the customer. This strong position can be seen when we look at profitability: while the company is cyclical and posted a loss...

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