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

Low Multiple For L.S. Starrett Reflects Family Control And Ignores Improving Fundamentals

Company overview

L.S. Starrett (NYSE:SCX) manufactures precision tools, gages, measurement systems and saw blades for industrial, professional and consumer markets.

SCX acting like it's 100 years younger

The reputation for quality and service built over a >100-year operating history (the company was founded by Laroy S. Starrett in 1880) is directly responsible for the leading position in the niche measurement market. In this aspect, its longevity (and resulting ability to adapt) is an asset rather than a liability. On a go-forward basis, growth should be driven by the following three catalysts.

SCX is less dependent on the more mature North American market, as 48% of revenue in the LTM was generated from international markets (>100 countries), including...

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