Graham Corporation is a fine example of the power of integrating services with tangible products. This precision engineering firm excels in customer integration. Rather than offer off-the-shelves designs, the management carefully studies the specific needs of each individual client. It is in the business of supplying industrial clients with critical equipment related to heat exchange and vacuum creation.

Heat exchange and vacuums are essential processes in most manufacturing operations. The company has an astonishing array of potential clients. Everything from a nuclear power plant to a humble soap making unit needs heat exchangers, steam condensers, and vacuums. The management has carefully built the competitive ability to produce its equipment to virtually any specifications. It is also flexible with respect to materials of construction, thus meeting the most exacting of customer requirements.

A distinct strength for stock investors is that this company has operating subsidiaries in the United Kingdom and in China. The business is therefore relatively isolated from fluctuations in foreign exchange balances. The subsidiaries also allow the corporate management to remain close to key clients and market groups.

The company’s recent business performance is impressive compared to other players in the Capital Goods Sector. Annual sales growth during the Most Recent Quarter has been 42.24 against just 16.29 for the industry. The Net Profit Margin over the last four quarters has been more than double what the industry has achieved as a whole. The company has accelerated capital spending at twice the rate of the industry over the past five years. The Price to Equity Ratio on a Trailing Twelve Months basis is only 12.49, which is attractive for the Capital Goods Sector.

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