John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

PMFG Inc. Is An Overlooked Play On The Rising Demand For Natural Gas

Executive summary:

  • PMFG Inc. (NASDAQ:PMFG) is attractive after the recent decline given that the weak quarterly results were largely due to temporary factors.
  • However, the long term growth outlook based on multiple secular demand drivers is still intact.
  • Furthermore, the increasingly shareholder friendly management may be open to alternative ways to extract value.

Company overview

PMFG operates through the following two segments:

The process products segment sells specialized products including separators, industrial silencing equipment, pulsation dampeners and heat exchangers.

The environmental systems segment sells specialized environmental control systems used for air pollution abatement. Its primary product, Selective Catalytic Reduction (NYSE:SCR) systems, converts nitrogen oxide emissions from exhaust gases caused by burning hydrocarbons to harmless nitrogen and...

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