I love companies that make essential little bits and pieces that most people never even think about. That philosophy has served me well with successful picks such as Gleason and Gundle/SLT -- both of which treated me well indeed before going private. So let's take a look at Actuant (NYSE:ATU), a relatively small company that makes electrical and industrial tools, as well as hydraulic systems for the RV, truck, and convertible car markets.

Its results for the fourth quarter were mixed. Reported revenue grew 44%, but internal "same business" revenue actually slid 5% from the year-ago level. Acquisitions make margin comparisons more difficult, and a series of discontinued operations, debt costs, and equity compensation expenses make earnings comparisons challenging as well. Accepting the company's adjusted earnings figures, you see per-share earnings growth of about 23%.

Although acquisitions also helped cash flow, the performance here was solid. For the full year in 2005, Actuant's operating cash flow more than doubled and free cash flow was up more than 135% from the year-ago level. Likewise, structural free cash flow (also known as owner earnings) was up strongly on a year-over-year basis. Despite the strong cash flow performance, debt is still quite high relative to equity.

Looking below the headlines, business is likewise mixed. A strong energy market is helping the tools business, and organic sales growth here was about 9% for the quarter. On the other hand, weakness in the RV and convertible auto market sent organic sales down 24% for the quarter. Taking a look ahead, management isn't too optimistic about a quick recovery in the RV business, but does believe that the auto market will improve and that the retail tool business should improve through channels such as Lowe's (NYSE:LOW) and Home Depot (NYSE:HD) next year.

I'm not that bothered by the company's debt position, but the valuation is a different story. I like to buy this sort of a stock at a dirt-cheap, idiot-proof price, and I'm not sure that's the case for Actuant. While it's exactly the sort of underfollowed and unknown company that I've made money with in the past, I'd rather hope for a better bargain before diving in with my own cash.

There aren't too many companies like Actuant, so here are some more Takes on the markets it serves:

Home Depot is a Motley Fool Inside Value recommendation.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).