KHD is an industrial plant engineering and equipment supply company. It has Operations/Clients all over the globe. Order intake for 6 months through June 2007 came from Russia 31%, Middle East 21%, Asia 26%, Americas 13%, Middle East 21% and Europe 7%.
It has good earnings visibility. Order backlog is growing faster than revenues. Current order backlog as of Feb 2008 is approx $1 billion USD.
They also have significant, steady royalty income from Wabush Iron Ore Mine. In 2007, this account to approx $16 million or $0.50 per share. With Iron Ore prices increasing 65% this year, the royalty should increase too.
It is undervalued - At current price of $27 with $1.74 estimated EPS for 2007, and $2.22 for 2008, it has 2007 P/E of 15.5 and 2008 P/E of 12.2.
Here's a detailed recommendation for KHD from ValueInvestorClub
I'm looking for a 3-6 month target of $33 (20% returns), although it's a good hold for long term.
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