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Ampco-Pittsburgh Corporation’s (AP) Business is a Symbol of Manufacturing Resurgence

2007 has seen significant business progress for the company. Sales have grown by about 15% over 2006, while net income has more than doubled. Both business lines have done well. It is evident that demand from industrial customers around the world has grown. The management has also succeeded in improving profitability.

This member of the Miscellaneous Capital Goods Industry has been in business for nearly eight decades. It makes steel rolls, heat exchange coils, centrifugal pumps, and air handling systems. The 2007 business performance of the company is particularly creditable given the difficult conditions that have prevailed in many world markets. Investors can see this as a trend towards new demand for superior engineering products.

The market capitalization continues to be just below $500 million. The stock therefore is a chance for small cap investors to enter the Capital Goods Sector, which is dominated by large corporations, through the small capital route. Institutions own 68% of the stock. The stock has traded at $40.48 on March 03 2008, against a 52-week range of $22.99-54.46.

The Price to Equity Ratio, on a Trailing Twelve Months basis, is just 10.43 against 17.42 for the Miscellaneous Capital Goods Industry. Sales growth over the past five years has been consistently better than for the industry and the Capital Goods Sector. This also applies to the Gross Margin. The Net Profit Margin over the last four quarters has climbed to almost twice that for the sector. This is clearly a stock to add diversity and durability to portfolios.

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