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Is The Eastern Company A Hidden Bargain?

The Eastern Company (NYSEMKT:EML) is a 155-year-old manufacturer of industrial hardware, security products and metal castings. It has a market capitalization of about $100 million and operates from ten locations in the U.S., Canada, Mexico, Taiwan and China with three business segments: Industrial Hardware (in 2012: 46% of revenues, 56% of EBT), Security Products (32% of revenues, 30% of EBT) and Metal Products (22% of revenues, 14% of EBT).

Revenues in foreign currencies are about 23% of total revenues.

The company is in a net cash position (the cash it holds represents 20% of its capitalization, but part of it is held abroad), has an equity ratio of 64%, has paid a dividend since 1940 and seems to...

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