Brian Peery
Brian Peery is portfolio manager of the $1.1 billion Hennessy Cornerstone Mid Cap 30 Fund (HFMDX), Novato, California. HennessyFunds.com
Today’s Stock of the Week is a well-diversified industrial company that is cashing in on the growing popularity of self-service payment systems.
Crane Company (CR) is a 161-year-old diversified manufacturer of engineered industrial products ranging from valves, pumps and pipes to high-tech cashless payment systems, jet engines and components for satellites.
The company’s payments and merchandising technologies segment has been growing fastest. This segment produces coin, bill and cashless payment systems, vending equipment and related software for applications such as self-checkout stations at grocery stores, self-serve ticket machines for rail transit, and snack and beverage vending machines. That segment represents 26% of sales, while the fluid-handling segment, which supplies industrial valves, pumps, etc., provides 40%…aerospace and electronics, 25%…and engineered materials, 9%.
Market share in the payment and merchandising segment is strong. Crane has half of the market in automated payment kiosks and self-checkout stations in the US and nearly 60% of the market in emerging economies including China and India. These systems replace minimum-wage workers and become more attractive to companies as minimum-wage levels rise, as they are doing in many parts of the world.
Crane’s other businesses will benefit from any improvement in the energy and general industrial markets. Crane’s products are used in aerospace, military and defense, construction, transportation, petrochemical, power generation and other fields. Revenue for 2016 will likely be $2.7 billion and grow to $2.8 billion this year and $2.9 billion in 2018.
Fiscal year.: Dec. Earnings per share: 2018 est./$4.94… 2017 est./$4.43… 2016 est./$4.19.
Brian Peery is portfolio manager of the $1.1 billion Hennessy Cornerstone Mid Cap 30 Fund (HFMDX), Novato, California. HennessyFunds.com
