Altra Holdings: Grinding Away at Growth

The designer and producer of motion-control equipment has nothing to do with the automotive industry. Rather, it provides key components for use in high-volume manufacturing where reliability and accuracy are essential in avoiding expensive down time. Some of the industries that Altra supplies (such as energy and mining) are in a real boom phase despite the general economic slowdown.

For the first-quarter ended March 29, earnings came in at $0.37 per share, compared with a consensus of $0.33. Jefferies & Co. analysts commented favorably on the performance, much better than the $0.30 they had predicted. Jefferies raised its earnings estimate for the year to $1.34 from $1.30, compared with $1.04 in 2007, and belatedly raised its price target to $18 from $13 — Altra had long since topped $13 and was trading at about $16.40 at the time of the earnings announcement on May 5.

Jefferies kept its rating at “hold” because the target was less than 15% from the actual price. The stock now has two “buys” and two “strong buys.” The mean price target is $19.50, compared with a high of $20 and the low Jefferies target of $18. The 52-week range is a high of $18.80 reached last July and a low of $11.07 in March.

Although Altra can trace its history back to the 1857 formation of T.B. Wood’s, one of the 19 brands in its portfolio, the company itself was cobbled together in 2004 and 2005 by the private equity firm Genstar Capital, and went public in December 2006. While the individual brands operate autonomously, they are supervised by the parent operating company, Altra Industrial Motion, Inc., based in Quincy, Mass., and follow the “Altra Business System,” which is modeled after the Toyota Production System and includes the Kaizen continuous business improvement concept designed to eliminate . . .

For access to the full article, you must be a registered member - it's FREE.

Already a member? Please log in below