In the annual Barron’s Roundtable of leading investment pros, Mario Gabelli, chairman of Gamco Investors, picks aircraft component supplier Kaman (KAMN) as a winner in 2006:
The company is located in Connecticut. There are 23.9 million shares outstanding. The stock is selling at 20. The company is Kaman. This company has a division, its crown jewel, that will benefit from the growth of commercial aircraft-engine production over the next five years. Boeing [BA] and Airbus will deliver 660 aircraft in '05, and close to 1,000 by 2010. The Kamatics division makes a self-lubricating roller bearing which has a longer life than competitive products. It is a market leader. Second, the company is getting orders from Sikorsky. Another business delivers retrofit helicopters, the SH2G, with orders from Egypt and Australia. They make small helicopters used for lifting logs, but they're phasing it out. They have an industrial-distribution business, and a guitar and music-distribution business.
Barron's: In other words, it's a unified company.
Gabelli: It's no different than General Electric or Tyco. Kaman's market cap is about $450 million. Earnings this year will be about $1.25, and next year, $1.50-$2. They had no vote for shareholders like us until recently. They just bought out the voting stock, and now there's only one class of stock.
KAMN 1-yr chart:
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