Tag - Avy

In the past, industrial customers maintained broad supply chains, contracting with numerous local distributors. This method is changing, though. Motivated by the need to reduce costs and improve inventory turns, most industrial customers are consolidating their supply chains and relying on first-tier distributors that can provide one-stop shopping. These customers are also demanding value-added services such as integrated supply, system design, and equipment fabrication, installation and maintenance. 

This supplier consolidation is creating budding opportunities for DXP Enterprises, Inc. (Nasdaq: DXPE) a leading U.S. supplier of maintenance, repair and operations (MRO) services, and KHD Humboldt Wedag International, Ltd. (NYSE: KHD), a global provider of plant design and equipment procurement services.    

KHD Humboldt provides industrial plant engineering services and equipment to mineral processors. It is a leading supplier to the global cement-manufacturing market and offers its customers proprietary technologies, plant and equipment design, and customized systems for process control and equipment optimization.

Formerly a merchant bank, KHD shifted its focus to industrial plant engineering in 2006. Since then, it has established operations in India, China, Russia, Germany, the Middle East, South Africa and the United States.

During the first nine months of 2007, KHD’s revenues grew 75% year-over-year to $418.8 million from $239.6 million and income from continuing operations climbed 102% to $38.6 million, or $1.27 per share, from $19 million, or $0.63 per share. New orders rose 123% in the September quarter to $240 million and exceeded $569 million for the nine-month period. Backlog totaled $762 million; nearly 90% of backlog was contracts in China, India, Russia and other emerging economies. KHD expects a 70% increase in full-year 2007 earnings to be between $1.70 and $1.75 per share.

Nanotechnology is still a business of the future. Although great strides have been made in creating the technology of the ultra small, very few commercial products have yet made any money for their developers. Altair Nanotechnologies, Inc. (Nasdaq: ALTI) is a case in point. The Reno, Nev.-based company has so far delivered just 61 products — lithium ion batteries for electric cars — and those cars have yet to hit the market.

But the company has several development contracts and joint ventures with big corporations in the works, including paint maker Sherwin-Williams Company (NYSE: SHW) and drug makers Eli Lilly & Co. (NYSE: LLY) and Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI). If those ventures play out successfully, its tiny particles could prove to have a very big future.

Altair was founded in 1973 under the name Diversified Mines Limited, acquiring and exploring mineral properties. For three decades it was a lackluster business. So in late 2003 it restructured with an eye on the future of Nanoparticles. CTO Bruce Sabacky, who has been with Altair since 1999, the year the company went public, began developing products based on nanomaterials.

In 2004 the company brought in a new CEO, Alan Gotcher, from Avery Dennison Corporation (NYSE: AVY), where he had led the development and commercialization of the “Duracell On-Cell” tester for the popular batteries. He has been moving the company’s new technology into commercial products.

From a peak of nearly $8 per share in 2000, the stock dropped to penny stock territory by mid-2003. It has steadily recovered since then, closing at $4.43 on Monday, with a market cap of $312 million, and is now flirting with the low end of analysts' targets. Three brokers polled by Thomson/First Call have price targets ranging from $5 to $6. Its 52-week high is $5.45, reached in October, and the low was $2.48, reached in January.