Gordon Reid Briggs & Stratton Corp BGG-N TOP PICK Feb 05, 2013

Manufactures small engines, generators, compressors, etc. Believes the dividend is safe. Looking at its balance sheet, you would find that it is much, much stronger than the average manufacturer in the US. Not expensive at 10X earnings and growing reasonably well.

Dividend is quite safe. Strong balance sheet. Generate quite a bit of free cash flow to support dividend. Had a tough spring, one of the wettest in history, affected lawn and garden sales. We will have to see how they do. This may extend the year for them. Longer term the company will be supported by housing recovery. He bought today.

A very fine company. Producer of low horsepower motors, lawnmowers, etc. Had some troubles over the last 6 months or so, which he feels was weather related. This is an opportunity as people will come back to what their needs are. Dividend is very safe. Debt is only 28% of capital. About a 6% free cash flow yield.

The drawback with this company is that there is a real push to improve the emissions of pollutants from these engines, and that is going to be a bit of a dilemma. The name he would encourage you to buy instead would be Cummins (CMI-N). Feels the US government will be creating some kind of a program to encourage trucks from diesel to natural gas and Cummins will be a massive winner on this.

(Top Pick Feb 5/13, Down 3.95%) Q4 ’12 was hurricane Sandy. They are becoming more efficient in terms of cost structure. He is happy to be patient on this one.