Historically, captains of industry may fill more high U.S. government appointed positions than folks from any other group. The founder and long-time CEO of a Portland, Oregon industrial equipment firm was once the U.S. Postmaster General.
Blount International (NYSE: BLT) manufactures equipment, accessories, and replacement parts for the global forestry, general contractor and yard care industries. The company's Industrial and Power Equipment segment makes timber harvesting and handling equipment, industrial tractors and loaders, mobile equipment rotational bearings, worm gear reducers, and swing drives. the Outdoor Products segment provides chainsaw parts, concrete-cutting equipment and lawnmower blades, as well as branded parts and accessories for the lawn and garden equipment market. Competitors include Caterpillar (NYSE: CAT) and Deere (NYSE: DE). The company was founded by former Nixon administration official, Winton Blount.
The firm pleased investors earlier in the month, when it announced Q2 EPS of 23 cents and revenues of $170.4 million. Analysts had been expecting 18 cents and $158.5 million. Management also guided FY07 revenues to $630-$655 million ($627.76M consensus). The CEO anticipated "continued good international market conditions through the second half of the year and some improvement in the North American timber harvesting market by the fourth quarter."
The stock popped through 30-day, 90-day and 200-day moving average resistance on the news and has since been consolidating the gain in a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the shares with one "buy" and three "holds." Analysts see a 26% growth rate, through the next year. The BLT P/E ratio (18.42), Price to Sales ratio (1.00), Price to Cash Flow ratio (12.00) and Price to Free Cash Flow ratio (15.93) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 89% of the outstanding shares. Over the past 52 weeks, the stock has traded between $8.85 and $14.36. A stop-loss of $11.95 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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