Ingersoll-Rand, never heard of It

Many investors might not immediately recognize the name Ingersoll-Rand (NYSE:IR) but most would recognize its products. Headquartered in Bermuda to take advantage of corporate tax savings, Ingersoll-Rand celebrated its 100th year anniversary of listing on the New York Stock Exchange in October 2006. In a recent interview in NYSE Magazine, CEO Herbert Henkel stated that Ingersoll-Rand reported revenues of well over $10 billion in 2006, with operating profits in excess of $1.5 billion. Profit margins are currently approximately 13.6%. Ingersoll-Rand has transformed itself from a supplier for construction and mining industries into a diversified industrial manufacturer in five business sectors.

1. Climate-control technology through its Thermo-King brand. Sales in this sector totaled $90-$100 million in 2006.

2. Compact vehicle technologies including Club golf carts.

3. Construction technologies, specifically the Bobcat skid-steer loader.

4. Industrial technologies, including fix-it services offered through its Hussman International unit. Fix-it service revenues accounts for 21% of total company revenue, just over $2 billion in 2006. CEO Henkel forecasts this sector will grow to over 30% of total company revenue within 5 years.

5. Security technologies, specifically its Schlage locks brand. This sector accounts for 20% of total company revenues.

Ingersoll-Rand is pursuing an ambitious strategy to expand into global emerging markets, especially India, China and Russia, where sales are forecast to grow 20-25% per year for the next few years. In India, Ingersoll-Rand has introduced Thermo King refrigeration units on trucks, thus helping to reduce fresh food harvest loss from 60% to 5%. Ingersoll-Rand is spending $175 million to build a manufacturing plant in the Czech Republic in order to expand in the southern Europe market. Ingersoll-Rand spent approximately $400 million in acquisitions in 2006, including security-device makers in India, China and Italy.

In the news recently, Swedish truck maker Volvo announced it agreed to buy Ingersoll-Rand's road construction equipment division for $1.3 billion. This would allow Volvo to expand its base of operations in the U.S. The Ingersoll-Rand division generated $850 million in revenue in 2006. Shares of Ingersoll-Rand stock closed unchanged on 6 March at $42.99.