Sun Hydraulics Corporation: A smooth ride

Investors have had a long, smooth and successful ride with Florida-based Sun Hydraulics Corporation (Nasdaq: SNHY), a maker and marketer of key parts that harness fluid power.

Founded in 1970, the small cap designs and sells proprietary screw-in hydraulic cartridge valves and manifolds that are used in all sorts of industrial and mobile operations. The company’s product lineup is sold through a global network of distributors.

Sun Hydraulics went public in 1997 and has expanded beyond its home base of Sarasota to establish branches in the United Kingdom, Germany, Korea and China. In July, Sun said that it also was setting up a sales office in Bangalore, India.

As of last Dec. 31, slightly more than half of Sun Hydraulics’ sales were from outside the United States. The same held true in the quarter ended Sept. 29, as much of the company’s double-digit growth stemmed from the international marketplace.

While Sun Hydraulics appears to be a healthy small-cap stock, the company hasn’t attracted much in the way of analyst coverage. Admittedly, parts made for hydraulic systems aren’t the sexiest things out there that merit coverage, but the few analysts who do follow Sun Hydraulics have a somewhat positive outlook—not overwhelmingly so, but with leanings toward a positive sentiment, nonetheless.

Sun Hydraulics shares started the year in the low teens, hitting what’s been a 52-week low of $13.20 on Jan. 8—on an adjusted basis, to take into account a three-for-two stock split that took effect on July 17. The stock climbed to an adjusted high of $38.07 on July 18; on July 16 (ahead of the split), the stock hit an unadjusted intraday trading high of $56.20. Shares of Sun Hydraulics closed at $27.31 on Friday.

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