NCR Corporation (NCR), The Boeing Company (BA): A Selection of US Industrial Companies

Page 1 of 2

Since the year started, I have kept a watch-list of US industrial companies. These days I could only find three companies that represented a long opportunity at current market prices.  Here I propose a portfolio composed of these three picks. The three companies combine value and growth, but one of them is especially interesting. Let’s take a one-by-one look.

Investing in special situations

NCR Corporation (NYSE:NCR)

NCR Corporation (NYSE:NCR) is a leading manufacturer of ATMs, self-service kiosks and POS devices. The company sells its products to the financial, retail, travel, and gaming industries. The company was bought by AT&T in 1991 and spun-off a few years later. With its 10.3% free cash flow (FCF) yield and selling at 2013 8.3x EV/EBITDA, I think NCR Corporation (NYSE:NCR) trades at a very conservative level.

Besides, it seems that right now may be the right time to start buying NCR Corporation (NYSE:NCR) shares. Near-term catalysts include: (1) The announcement of the third phase of the pension plan to address the remaining unfunded balance (which could boost FCF by $50 to $70 million in the next two years); and (2) greater than expected synergies from recently purchased Radiant and Retalix.

I believe that current market prices do not reflect NCR Corporation (NYSE:NCR)’s potential earnings upside, nor Radiant and Retalix deal synergies, nor the value of the company’s defensive services business.

Gaining market share and growing margins across the board

WESCO International, Inc. (NYSE:WCC), one of the leading providers of electrical products in America, continues to drive market share gains in the fragmented US electrical distribution market. I am convinced the company is a clear long as the US housing market gains stamina.

For the first quarter this year, EPS was $1.12, or up 13% year-over-year (yoy) on revenues of $1.81 billion (up 13% yoy). One important factor to stress when looking at WESCO International, Inc. (NYSE:WCC) is its constant gross margin expansion. As a matter of fact, for the first quarter, gross margin of 21.1% was up 120 basic points yoy (a record), and well above the company’s 20.6% guidance. The recent EECOL acquisition reinforces business momentum, and I would expect the steady gross margin improvement to support a future multiple expansion.

To sum up, I believe WESCO International, Inc. (NYSE:WCC) represents a good long idea when trading at 2013 11.8x P/E.

This flying giant seems ready for take-off

I chose The Boeing Company (NYSE:BA) because I feel there is increasingly convincing evidence that the 787 program is starting to work for the company. If the program is finally a success, it could drive Boeing’s fundamentals and, henceforth, its stock performance.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!