Although it was an ugly summer for off-road vehicle components maker Sauer-Danfoss (SHS), the company nevertheless ended 2011 as one of the relatively few industrial stocks to post double-digit gains. While OEM order rates for off-road equipment like wheel loaders, bulldozers, harvesters, and so on have started to taper off a bit, there is a significant difference between “slow” and “stop” and Sauer-Danfoss looks poised for another strong year in 2012. With minimal institutional support, Sauer-Danfoss is off the radar of many investors, but the value here still merits a serious examination.
Off-Road Still On Track
Sauer-Danfoss is basically in the business of making components for off-road vehicles. Sauer-Danfoss builds the transmissions that make machinery like excavators, combines, and trucks go, as well as other components like steering units, valves, pumps, controls, and motors that allow these vehicles to operate the buckets, shovels, headers and so on that represent the “business end” of the vehicle. While there is an after-market component to the business and Sauer-Danfoss can work with custom orders and retrofits, a lot of the company's sales are to the OEM manufacturers like Caterpillar (CAT), CNH (CNH), Deere (DE), Sandvik (SDVK.PK), and so on.
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Sauer-Danfoss Still Looking Sweet
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