Norman Levine Kone Oyj KNEBV-OMX TOP PICK Jun 23, 2014

Elevators around the world. Likes the business. 3.3% dividend will probably get increased again this year. New elevators and servicing of them.

Finnish company. Third-largest elevator/escalator company globally. Trades in Helsinki, but also in New York in the Pink Sheets. Has 2 distinct businesses. One is the new elevator and elevator construction business and the other part is the maintenance business. In the developing world, the big business is new elevators, new escalators and construction. In the developed world, the big business is on maintenance contracts. Margins on these are humongous. Yield of 3.44%.

Elevator company from Finland. A really good company, but he just doesn’t like the space right now. Demand for elevators is not going to grow as fast as it has in the past 10 years or so.

(Top Pick Dec 30/13, Up 19.68%) Third largest elevator and escalator company in the world. New ones as well as the highly profitable maintenance contracts. The earnings came in very well so they went up in October.

(Top Pick Mar. 21/14, Up 49.94%) Based in Finland bit sold on t pink sheets in the US. They are very big in China and Toronto. Servicing the elevators and escalators is the high margin part of the business.

(A Top Pick June 23/14. Up 27.84%.) Elevators and escalators basically have 2 businesses. One is new installations and the other is service. For new installations this probably has the biggest exposure of all the elevator/escalator companies to China. Growth in China has started to cool down some. In North America and Europe, it has big exposure to service contracts. This is probably going to get a bit of cooling right now.

(Top Pick June 23/14, Up 15.09%) Elevators: new construction (China Exposure) plus maintenance. The China business is slowing some, but the maintenance business is picking up. He would still buy it and does for new clients. It trades on pick sheets (KNJBF).

This trades in Helsinki, but buy it on the pink sheets in the US under KHNJF. They are either the 2^nd or 3^rd largest elevator/escalator company globally. A big part of their sales is in China, which has been slowing down, but Europe and North America have been picking up. They get about 60% of their revenue from service, a high margin much more stable business. Dividend yield of 3.83%. (Analysts’ price target is €42.14.)

Look at revenues and find out who's building office towers. Look at recurring revenues, because elevators often break down and need constant service. Kone is more European while Otis is global. If the USD falls, Otis will improve better. It comes down to the USD.