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Baldor Electric – NYSE (BEZ). Presentation by: Cole Stocking, Neal Smith, & Darron Campbell. Basic Business of BEZ. Major Products: Electrical Components to include the following: Electric motors (both AC & DC)
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Baldor Electric – NYSE (BEZ) Presentation by: Cole Stocking, Neal Smith, & Darron Campbell
Basic Business of BEZ • Major Products: Electrical Components to include the following: • Electric motors (both AC & DC) • AC & DC Controls (Inverters, Microdrives, Integral Tachometers, & & Lifting Magnets) • Gear Products (AC & DC Gear Motors, Speed Reducers) • Market Share • Baldor is the largest manufacturer of AC & DC Electric Motors • Account for roughly 13% of the Electrical Component Industry
Industry Investigation • General Growth of Industry • Large increase in industry size following the Korean War • Continued increase til early 2001 at which time industry leveled off with frequent increases and decreases • Position in Industry • Assumes 13% of the Electrical Component Industry • Considered Average amongst • Average Growth Rate Compared to Industry • From 1998-2008 – Baldor stock grew 6.3% • From 1998-2008 – Industry grew roughly 9.3% • Average Price Ratio Compared to Industry • Baldor average P/E Ratio is 17.12 • Industry Average P/E ratio is 24.78
Fair Value of Baldor Stock Current Price $ 27.94 • P/E Ratio $43.16 • P/CF Ratio $33.68 • P/S Ratio $32.55 • Baldor stock is undervalued
Buy/Sell Recommendation • BuyBaldor stock based on the Price Ratio Analysis on previous slide which indicates that Baldor stock is currently undervalued; therefore, we believe that it will grow closer towards its fair value by year end.