K-Tron International: An Undercovered Winner

I wanted to highlight a very fast mover that has virtually no coverage. I happened to read about K-Tron International (KTII) in a local northeast newspaper and was impressed in their execution, strategy and humble performance.

K-Tron makes equipment like feeders, meters and conveying equipment for the pharmaceutical and food industries. Due to the regulatory environment and relationship expectation in these industries, there's usually a pretty high barrier to entry for new market participants and a high profit margin on these niche products.

The stock has doubled in the past year. And this is no anomaly. It's also delivered a 540% return over the past 5 vs. the S&P at 82%. Here's a 1 year snapshot.

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The company's future revenue bodes to be pretty steady, regardless of what's going on in the market due to the lack of correlation with the general market on both a historical stock performance standpoint and the industries in which it serves (food and pharma are very defensive; they are the last thing people stop consuming when the going gets rough. They may stop buying iPhones and paying for 300 cable channels, but the food and drugs are pretty much untouchable).

Most of the recent coverage you'll find on the Yahoo and Google boards refers to regulatory filing and company press releases. Here's the most recent press item following their May earnings when their profit more than doubled - a couple sentences with no original commentary.

Now is an optimal time to buy into this under-covered company. No Cramer, no blogs, no CNBC coverage, etc equals a great entry point. This is another great one like BluePhoenix Solutions (BPHX) (posted earlier this month) that is a fast mover with strong fundamentals that has yet to win prom king.

KTII 1-yr chart:

Disclosure: I do not currently have a position in KTII, but am strongly considering one in the future.