SIFCO Industries: A Contrarian Investment
Adam Sues submits:
SIFCO Industries Inc (SIF) is engaged in the sale of various metalworking products and services, and has been in business since 1916. The stock price has been volatile over the past three years, touching $24 back in 2007, falling to $4.30 in 2008, and recovering to $17 earlier this year.
The company is heavily dependent on the fortunes of the commercial airline industry (similar to Servotronics (SVT), a Value Uncovered holding), causing a cyclical revenue pattern – the stock price has dropped almost 40% from its yearly highs as the company struggles with weak short-term demand in the airline industry. Despite the price volatility, the company has improved its financial condition by producing solid operating income and cash flow.
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