Airboss of America (BOS-T)

Did well during Covid, but then contracts got pushed. Has been bidding on meaningful contracts. He thought market would respond more favourably to improvements in AEP, but people seem to be waiting for more contracts. Optionality to unlock value in defense, property, AEP. Great buy here.

This is a beautifully run company with revenues of $300 million per year. They are into anything rubber. The balance sheet has not changed in years and they recently increased the dividend. He thinks today’s current price is still expensive so would not buy it here. If you owned it for the dividends you should hold.

Rubber compounds, where they do conveyor belts, rubber automotive products, etc. The balance sheet is good, but they are in a state right now where nothing is really working their way. They are doing what they can. They are buying back shares, etc. and they still pay a dividend. Management has very little positive things to say right now. Until management improves, he wouldn't be too interested.

He thinks it might be bought out at some point. It will likely go up in 2018. It is a supplier into the oil industry among others. It probably won’t go down if there is a correction.

(A Top Pick June 24/16. Down 4.25%.) He pulled this after they had some pretty bad news and poor earning results. Management is doing the right thing by paying down debt and buying back shares. Their free cash flow is still fairly strong. He wouldn’t bother owning this until you saw some better outlook coming from management.

(A Top Pick April 28/16. Down 18%.) This has had quite a good history for 2-3 years, and got hit by the oil/gas sector, and a very, very slow defence buying in the US. This is still a Hold.

The biggest rubber compounder. They are sole supplier for all the chemical and biological resistant boots and gloves for the US and Canadian armed forces. They will benefit from the pickup in infrastructure spend. They also do rubber bushings for the auto industry. (Analysts’ target: $14.00).

Has always liked this, but they are still exposed to areas of the economy that are struggling. It is going through a transformation right now and there will be bumpy quarters along the road. We are going to see a turn around in US military spending, as well as elsewhere in the world.

It looks cheap here. It might be a value trap because the last couple of quarters have not been good. He is not adding but has not sold. He hopes things will start to turn in the next couple of quarters.