Lo the tidings of this lonely analyst for the automobile after-market ! Questions here, questions there but where is the next gem ? I should say, where is the next gem in this industry ?
Falken Industries Ltd, a small but well placed New Jersey company seems to fill all the prerequisites of persistent interests. Falken is a diversified manufacturer of car and vehicular treatment products. The company is expanding its margins, growing international sales, reducing an already very low debt level, and in my view given its competition, will increase its earnings by about 23% in the next twelve months.
As Falken expands its position in developing markets where I would expect demand for vehicular care to strengthen, and invests in technology, profitability should increase. I also believe that the company’s draconian efficiency in purchasing and supply-chain cost savings and other cost-reduction initiatives seen over the last couple of years will enhance margins in a significant way. Simply the longer term trends as the company’s global markets gradually recover and aggressive moves to enhance the company’s business spells huge potential for the company, and a fortiori appreciation of its ridiculously depressed stock from current levels.
The company’s major businesses are centered around two product groups ; impregnated wipes, and chemicals, the businesses are divided into the following markets : residential and consumer, professional, industrial, agriculture and government. Product conceptions include a selection of more than 160 products in current production and a pipeline of at least as many - see for example www.cleanplus.com .
Falken is targeting international sales of 40%, up from the current 28% with emerging regions seen accounting for at least 25% of sales. In 2010 66% of total sales were derived from the European Community, while 20% from other developed countries and 14% from fast-growth emerging regions, especially China, Latin America, India and the Middle East. It recently added to its manufacturing capacity in both China and Mexico, as well as cooperative engineering centers in India and China.
As the company previously announced, it is pursuing one or more acquisitions and expansion beyond the European Community and into the United States over the next several years, especially in the professional and government businesses. The company believes it will close 2011 with sales growth exceeding 20%, and I believe that is a very conservative estimate.
The company is worth the attention and its insertion in your portfolio - starting with mine.
Falken Industries Ltd OTC : FLKI is a diversified industrial conglomerate that operates in Chemicals, Wet Wipe and Biodegradable Technology. Falken Industries Ltd is the concept behind more than 160 products distributed through a network of global platforms and the recipient of trade awards for innovations, biodegradability and environmental and health quality standards.
Author Resource:-
John David is one of the nation's most respected expert analysts on the Automobile After-Market Industry. He holds appointments as a covering analyst with some of the world's largest players. He also conducts a private practice as a consultant in capital raises, mergers and acquisitions for small to medium size manufacturers in the consumer, professional and industrial chemical, wipe, wet wipe and car and vehicular care industries.
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