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Ametek, Inc. (NYSE:AME) is "instrument"al when it comes to monitoring equipment and electric motors. The company's Electronic Instruments Group makes monitoring, calibration, and display devices for the aerospace, heavy equipment, power-generation, and other industrial markets. AMETEK's Electromechanical Group makes air-moving electric motors for vacuum cleaners and other floor-care equipment, and brushless air-moving motors for the aerospace, mass-transit, medical, and computer markets. The group also makes specialty metals for the electronics, telecommunications, consumer, and automotive industries. Each group accounts for about half of sales.

Oh, and one more thing it makes: profits. The company hasn't had a loss in its earnings per share going back before 1990. While earnings were somewhat erratic for a few of those years when eps decreased slightly from the previous one, they are currently on an upward trend. In 2003, eps was 87 cents a share. In 2004, $1.09. In 2005, $1.33. 2006 is expected to finish at $1.70 and look for $1.90 this year. Not coincidentally the stock took off from $8.70 in 2002 and has never gone back, splitting twice since then (prices adjusted for a 2 for 1 split and a 3 for 2 split).

Internal growth and recent acquisitions account for the increase of revenues by over 25% in 2006. It recently bought Land Instruments, SPECTRO, Solartron, and Pulsar. Expect more acquisitions to help drive sales higher, profits as well, along with cost cutting. Also contributing will be new products with better margins.

AME is making good progress penetrating the aerospace analytical instruments markets as well as others. These growing markets along with consumer and commercial spending should increase revenues by 10% in 2007.

Some other numbers: this is a mid-cap company of $3.4 billion. The stock price moved steadily higher since 2002 and leveled off for most of 2006. Debt is 35% of capital. Revenues are projected to rise by 10% a year for the next 5 years while earnings should improve 12.5% a year, on average, in the same time frame. Return on Equity is a very respectable 19.5%. The dividend was boosted 50% last year but still only yields less than 1%.

Ametek is one of those "under the radar" type of stocks. There isn't a public brand name to know. But it has delivered solid profits for several years and appears to be able to continue that trend. Shareholders with patience have been rewarded. Whether all the goodness is already in the stock price has yet to be seen, but investors looking for a smaller company that is diversified will find this one of interest.

AME 1-yr chart
AME

Disclosure: Author has no position in AME.

Source: Eye on Ametek, Inc.