Monday, September 10, 2012

Sun Hydraulics (SNHY) 2012 Review

Sun Hydraulics, SNHY,  designs, manufactures and markets valves and manifolds for hydraulic systems including electrical and nonelectrical actuated valves, machined manifolds and custom valve and manifold assemblies for use in construction agriculture, mining, industrial and fire and rescue equipment. 

The company has grown dividends and profits at a 10-18% pace over the past five years earning a 15-20% return on equity. SHNY’s business suffered dramatically in the 2009 recession; however, it has made a strong comeback which should continue as a result of:

(1) growth in global industrial capital expenditures,

(2) price increases,

(3) exposure to Germany, Korea, China and India.


(1) its international business exposes it to the uncertainties of foreign laws and regulations as well as currency fluctuations,

(2) intense competition.

SHNY is rated B+ by Value Line, it has no debt and its stock yields 1.6%.

Statistical Summary

Stock Yield Dividend Growth Rate Payout Ratio # Increases Since 2002
SNHY 1.6% 12% 25% 6
IND 1.4 7 22 NA

Debt/Equity ROE EPS Down Since 2002 Net Margin Value Line Rating
SNHY 0% 26% 1 30% B+
IND 35 18 NA 8 NA


Note: SNHY stock made great progress off its March 2009 low, quickly surpassing the down trend off its July 2008 high (straight red line) and the November 2008 trading high (green line). Long term, the stock is in an up trend (blue lines). Intermediate term is in a trading range (purple lines). The wiggly red line is the 50 day moving average. The Aggressive Growth Portfolio owns a 50% position in SNHY. The stock is on the Aggressive Growth Buy List; but new shares haven’t been purchased for reasons of our much discussed investment strategy. The lower boundary of its Sell Half Range is $49.

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.