Gordon Reid Briggs & Stratton Corp BGG-N BUY Oct 04, 2013

Makes power equipment and generators. A way to play the housing market and the recovery process of hurricanes, etc. High free cash flow yield of over 12%. Buying back stock. Dividend yield of 2.04%.

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.

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.