Targeted Strategies for Today's Evolving Markets

MissionIR Blog

Schmitt Industries Inc. (SMIT): Balanced Profits for a Balanced Portfolio?

Schmitt Industries (SMIT) is a maker of balancing equipment for the machine tool industry and precision laser measurement systems, and operates in two primary business segments: Balance and Measurement.

The balance segment designs, manufactures, and markets computer-controlled balancing equipment primarily to the machine tool industry. The company’s measurement business specializes in the manufacture of products used to measure the capacity of chemical storage tanks, such as liquid propane.

Measurement products are sold through distributors, while balancer products are sold through independent manufacturer’s representatives, distributors, and original equipment manufacturers. Oregon-based Schmitt said earlier this month that fiscal fourth quarter earnings rose to $426,000, or 14 cents per share, on $3.1 million in sales, compared to earnings of $355,000, or 13 cents per share, on $2.9 million in sales during the year-earlier period. However, Schmitt did say sales from European customers plunged $257,000 for its fiscal year ending May 31.

For fiscal 2007, Schmitt had sales of $11.4 million, with about two-thirds coming from the balance segment and the remainder from the measurement segment. The company has about $5.5 million in cash on hand and no debt on its balance sheet. Schmitt Industries also appears to be cheap compared to its peer group, trading at a price-to-earnings ratio of less than 15 while its industry trades at a PE of over 24.

Schmitt shares closed at $5.75 on Friday. The company, with a $16.5 million market value, trades about 2,100 shares a day, its daily average for the past three months. The 52-week range for Schmitt shares is $4.50-$8.00.

Let us hear your thoughts below:

This entry was posted in Small Cap News. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *