Seeking Alpha: Graham Corp Already Seems To Be Building In Better Days

Investors have seen multiple examples recently that demonstrate how quality industrial companies can bring in buyout offers at valuations above what I believe most analysts would calculate as fair on a stand-alone basis. Over the past three months, Gardner Denver, Edwards Group (EVAC), and Kaydon (KDN) have all accepted deals that I believe fit that pattern.

That brings me to Graham Corp (GHM). I love the idea of a company that holds strong market share in engineered-to-order ejectors, condensers, heat exchangers, and pumps, not to mention one that produces good returns on invested capital without overwhelming institutional ownership. On the other hand, shares are up more than 80% over the past year and it's tough to find a metric under which the shares are cheap. With that, I believe these shares are already baking in some degree of takeout premium, though I intend to keep it on the watchlist in case it sells off at some point.

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Graham Corp Already Seems To Be Building In Better Days

Seeking Alpha: Thinly-Traded Edwards Group Could Outperform On Semi Equipment Pickup

When it comes to companies tied to the semiconductor capital equipment cycle, talking about valuation often feels pretty pointless. Creating accurate long-term models is a Sisyphean task, and the realities of the market mean that the stocks often go much too low in the bad times and much too high in the good times. With that in mind, then, Edwards Group (EVAC) doesn't necessarily jump out as a screaming bargain today, but I suspect that a recovering in the cyclical semiconductor, panel, and LED markets will lead to significant stock performance for a year or two.

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Thinly-Traded Edwards Group Could Outperform On Semi Equipment Pickup