Kaydon Corporation (KDN) has had a substantial selloff over the past several months. Part of the selloff was due to a special dividend of $10.50 and the rest of the pullback was due to concerns on demand, especially with wind energy customers. However the stock is offering a good entry point given its high yield, reasonable valuations and some recent insider buying.
"Kaydon Corporation engages in the design, manufacture, and sale of custom engineered, performance-critical products in the United States, Germany, and internationally." (Business description from Yahoo Finance).
Six reasons to pick up KDN at under $21 a share:
- The stock yields 3.9% and the company has increased its dividend payouts by a 10% annual clip over the past five years. The high dividend yield should put a floor under the stock.
- Two insiders bought over $250K in new shares at higher prices in May.
- The stock is selling near the bottom of its five year valuation range based on P/B, P/E, and P/CF.
- The stock sells for just over 11 times forward earnings, a discount to its five year average (19.3). KDN also have five year projected PEG of just over 1 (1.04) under its five year average (1.8).
- Only three analysts cover the stock. They have price targets ranging from $27 to $36 a share on the stock, all significantly above the current price of KDN.
- The stock looks like it trying to bottom here (See Chart)
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in KDN over the next 72 hours.