Stock Review: Hardinge, Inc.
What would you think of a company with the following characteristics?
- Manufacturers precision industrial equipment with a worldwide market and customer base.
- Has strong and growing profitability selling its products.
- Earnings are projects to grow at a 20% to 30% rate for the next several years.
- The stock trades a a PE of less than 9.
That sounds pretty good to me, and the company I am looking at is Hardinge, Inc. (HDNG: 8.34 +0.1381 +1.68%). This New York based company manufactures advanced metal cutting equipment (lathes) for use in industries like aerospace, automotive, defense, heavy equipment and medical equipment. 60% of sales come from outside the U.S. and growth has been excellent.
The share price of Hardinge was cut in half in November when, although net income for the 3rd quarter was up 35% quarter over quarter, the per share income was only up a penny. A recent share offering had diluted the shares outstanding. Orders were also down in the 3rd quarter, but that was in comparison to 2006 Q3, which had a bi-annual trade show which generated a one time order boost. I see a company that is still growing sales and net income with projected income growth of at least 20% going forward. As noted above, if this is the case the current PE of 9 shouts value to me.
I am adding HDNG to this site’s 20 Stock Portfolio. This stock brings the total number in the portfolio to the 20. It has been a 5 month process to select 20 stocks that I considered good investments. My next post will be on what I plan to do from here.
Note: I currently do not have a position in HDNG.
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Interesting idea. One thing that would help very much is a simple listing of the last 8 quarters of revenue, orders, operating earnings with YoY growth percentages.
Then we could see the order bubble from last year and get a clearer picture of the fundamentals.
Also knowing their key one or two competitors would help as well.