Met-Pro: Pollution control firm recovering from a fire sale

In the stock market, as in nature, it takes time to recover from a fire. This year, Met-Pro Corporation (NYSE:MPR) has been recovering from a fire sale.

Harleysville, Penn.-based Met-Pro is a pollution control firm that helps corporations and organizations clean up their own messes. It won't solve global warming, but governments around the world are increasingly pressuring industries to make their processes more environmentally friendly, and that has been good for business, even in a lousy economy.

But the fan hit the spark in January of this year, when the company announced the discovery that in 2006, one of its sales people had been booking revenues early. The sales person was fired, and Met-Pro had to restate earnings for several quarters of fiscal 2007 (ended Jan. 31, 2007), shifting some earnings from one quarter to the next, although total earnings for the year remained the same.

The market burned the stock. It lost over 16% of its value in little more than a month — closing at $9.83 on Feb. 6, down from a close of $12.02 the previous Dec. 31. "The reaction was extreme," says Ryan Connors at Boenning & Scattergood Inc. in a phone interview.
 
The stock has since made an equally strong recovery, shooting back up to $13.44 at Tuesday’s closing. Its 52-week low was $9.30 and its high was $15.25. Its market cap is $202 million.

Connors thinks it has further to go. He maintains a "market outperform" rating and a $14 price target. Richard A Verdi of Sturdivant & Co. is even more optimistic. On May 23, he reiterated his "market outperform" rating and raised his target price to $16 from $14.

Met-Pro is divided into three segments that help keep the world clean. Its pollution control products include air scrubbers, exhaust systems, dust and particulate matter collectors, and water treatment chemicals to help reduce air pollution, avoid contaminating water and reduce odors. The fluid-handling segment makes specialized pumps and filters to move and treat corrosive fluids, including acids, solvents, caustics, bleaches and seawater, as well as extremely hot oil and water. The filtration and purification technologies segment produces water treatment chemicals and filters that help reduce chemicals and metals such as iron, lead and copper from . . .

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