5-Star Stocks Poised to Pop: Sun Hydraulics

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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, hydraulic valve and manifold maker Sun Hydraulics (Nasdaq: SNHY) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Sun Hydraulics' business, and see what CAPS investors are saying about the stock right now.

Sun Hydraulics facts

Headquarters (Founded)

Sarasota, Fla. (1970)

Market Cap

$330.9 million

Industry

Industrial equipment and components

Trailing-12-Month Revenue

$124.5 million

Management

CEO Allen Carlson (since 2000)
CFO Tricia Fulton (since 2006)

Return on Equity (Average, Past 3 Years)

21.2%

Cash/Debt

$31.4 million/$0

Dividend Yield

1.8%

Other Highly Rated Industrial Equipment Stocks

Caterpillar (NYSE: CAT)
United Technologies (NYSE: UTX)
Deere (NYSE: DE)

CAPS Members Bullish on SNHY Also Bullish on

General Electric (NYSE: GE)
Johnson & Johnson (NYSE: JNJ)

CAPS Members Bearish on SNHY Also Bearish on

Dillard's (NYSE: DDS)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 99% of the 1,409 members who have rated Sun Hydraulics believe the stock will outperform the S&P 500 going forward. These bulls include DavidBear and All-Star Gedmitri, who is ranked in the top 20% of our community.

A few months ago, DavidBear tapped the stock as a rather boring way to secure stimulating returns:

This is a well run company with a solid management and a business model that values people and innovation. Sure making cartridge valves and manifolds is not the most exciting technology in the world, but they will always be needed for power transfer. [H]eavy construction equipment will make a comeback, and [Sun Hydraulics] is surely best-of-breed.

In a more recent pitch, Gedmitri explains why Sun Hydraulics seems to be peaking through the clouds:

This stock has managed its balance sheet very well during this downturn. Its price is the same as it was in early 2005 with a stronger balance sheet and positioning in the market. ... Their products are necessary for the eventual economic turnaround and their rapid delivery gives them a further advantage. With some companies, the attraction to buy comes from a low price, good management, lots of cash, or some other reason. This company has them all and then some.

What do you think about Sun Hydraulics, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Sun Hydraulics is a Motley Fool Hidden Gems pick, and Johnson & Johnson is a choice of Income Investor. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 05, 2009, at 11:45 AM, catoismymotor wrote:

    Well run and pretty good moat. The P/E for this kind of business is too high for my comfort. Okay for CAPS.

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