Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, petrochemical equipment manufacturer Graham (AMEX:GHM) has earned a coveted five-star ranking.

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

Graham facts

Headquarters (Founded)

Batavia, N.Y. (1936)

Market Cap

$145.7 million


Industrial machinery

Trailing-12-Month Revenue

$93.6 million


CEO James Lines (since January 2008)
CFO Jeffrey Glajch (since March 2009)

Return on Equity (Average, Past 3 Years)


Cash / Debt

$45.3 million / $53,000

Other Highly Rated Machinery Stocks

Ingersoll-Rand (NYSE:IR)
Illinois Tool Works (NYSE:ITW)

CAPS Members Bullish on GHM Also Bullish on

General Electric (NYSE:GE)
Procter & Gamble (NYSE:PG)

CAPS Members Bearish on GHM Also Bearish on

Altria (NYSE:MO)

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

On CAPS, 98% of the 1,168 members who have rated Graham believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars toolboy2 and brightsideLP, both of whom are ranked in the top 2% of our community.

Three weeks ago, toolboy2 touched on the stock's steadily improving situation:

I came across these guys about a year ago. Since then, they continue to strengthen in my fundamentals screener. … Nice profit margins and [little debt] look very appealing in this economy. A solid buy under $15 in my opinion.

In a pitch from three days later, brightsideLP elaborates on Graham as a scintillating small cap. Here's an excerpt:

[T]here is potential for lots of growth is this niche market that [Graham] sells to.
Margins are excellent and management has a solid track record. The stock is way too small for any large funds to hold a stake in.

Large cash position and [little debt] = they will be here if / when oil moves north again. In a rising oil environment -- [Graham] is a wonderfully exciting growth story. Pristine balance sheet.

[Graham] has also gone through a significant restructuring. I believe this will lead the company to produce significantly higher than historical cash flows … which are already pretty decent. The risk/reward is still favorable at current prices.

What do you think about Graham, 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!  

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Procter & Gamble is a Motley Fool Income Investor pick, and the Fool owns shares of it. The Fool's disclosure policy always gets a perfect score.