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One summer between my two years of Wharton grad school, I was down the shore with some of my classmates. First we got all hammer head sharked and went to Montego Bay. Then we went to Bar Anticipation. Then after that, the night got all wrecked because I thought I lost my Keasbeys. Now Keasbey, NJ is actually a town in NJ. I actually thought I lost my keys. But I kept saying I lost my Keasbeys. In reality:
1. My keys were in my bathing suit back at the shore house.
2. I wasn’t even driving.
Now cars don’t even have Keasbeys. If you rent a car from Avis, after you use and abuse the rest room there, they give you something that you keep in your pocket, but its not the key to the vehicle. It’s something else. I don’t even know what it is, but I hate them.
If you've unlocked a Town & Country minivan or any other Chrysler vehicle, you've used a product made by Strattec Security Corp. The Glendale company supplies 100% of the keys and locks for Chrysler cars and trucks, and sells large amounts to General Motors, Ford and other automakers as well.
So whether or not you use a key, or something that has replaced a key. The world would go absolutely nowhere without Keasbeys…or without these products made by Strattec.
Today I bought stock in Strattec (STRT) at 62.96. I will sell it in 4 to 6 weeks at 72.59. Here’s why I like Strattec:
It really all starts with the charts. I love this chart. STRT stock price is up 111% in the last 52 weeks, yet its PE is only 19.4. This is the proverbial sweet stock of Wall Street. You get the growth that you covet, yet the earnings generated by the company make this growth sustainable.
This isn’t just about the Keasbey. Something is contributing to this phenomenal growth. The company now makes ignition lock housings, latches, door handles, power sliding doors and liftgate systems for the automotive industry, and keeps searching for — and finding — new ways to position itself as a broader "access system" manufacturer and a supplier of parts for industries even beyond autos. Basically if you are locked out and want to get in, STRT wants a piece of you. Keasbeys only represent about 30% of STRT’s sales – they used to be 75% in 2001.
Strattec was spun off from Briggs & Stratton Corp. as a public company in 1995. Urged by automakers to have more of an international presence, Strattec, in 2000, struck a deal with a privately held German company, Witte Automotive, and formed a partnership that allowed them to pool their resources without merging. Adac Automotive of Grand Rapids, Mich., also privately held, was added to the strategic alliance in 2006. In addition to its Glendale location, includes two plants with about 2,200 employees in Juarez, Mexico, a distribution center in El Paso, Texas, with 30 workers, and about 60 sales and engineering employees in Troy, Mich.
Strattec partnered with a digital lock firm to make biometric security products, which require recognition of a fingerprint to function. The move is expected to let Strattec bring biometrics to its automotive business, as well as diversify it into residential and commercial markets. For example, Krejic said, the partnership allows Strattec to make a key fob using fingerprint recognition, which can deter car theft. Now this is all crap if you ask me. Last month I got locked out of my Houston Nutt apartment because the battery in my fob died. Then the same week, the battery in my Keasbey remote died and I couldn’t get into my Cadillac.
The CEO even admits he wants to make Keasbeys. “Twenty years ago we were sitting around the table saying locks and keys are going to disappear over time. That's happening, where you might have put five on a car before, now you put one or two. And instead of being the primary security device, the mechanical side has become the backup security device.
We've already gone through the major shrinking of the market there. Is there still a need for mechanical? Yes, but instead of five locks, it's one lock. But what's happened is there's been a migration to electronics.”
During the recession three of Strattec’s biggest buyers filed for bankruptcy protection, and the overall auto industry went to the brink of death before being saved by the feds. Since that time Strattec restructured, improved its operations and expanded its product lines, signed various joint venture and alliance agreements which have allowed the company to become a worldwide auto parts supplier. What doesn’t kil you makes you stronger. The restructuring, expanded product lines, and worldwide operations have helped Strattec become a more diversified auto parts manufacturer and has grown its sales and margins in the ensuing years.
Strattec was spun off from Briggs & Stratton in 1995 as an independent company. After the millennium, there were massive changes in the lock and key industry which deteriorated the company’s market share and competitive advantages. Strattec got smart, it was well prepared for the change from basic locks and keys and the diminishing of the amount of locks and keys needed per vehicle, and has transitioned into the electronic key arena as well as expanding its operations into various fields including: Door handles, power doors, trunk latches, lift gate latches, tailgate latches, hood latches, side door latches, ignition lock housings, sliding side doors, lift gates and trunk lids. The trend of growing sales and margins should continue. If you have to touch something to get into something, then you probably paid STRT to do it, unless you lose your Keasbeys. Actually, this is Keasbey:
ANAL-ysts are seeing the same thing and are adjusting their guesstimates. This trend has helped the consensus estimate to trend higher, going from $3.75 a share not long ago to its current level at $4.24. What’s going on?
Net sales for the Company's second quarter ended December 29, 2013 were $81.5 million, compared to net sales of $72.2 million for the second quarter ended December 30, 2012. Net income for the current quarterly period was $3.9 million, compared to net income of $2.4 million in the prior year quarter. Diluted earnings per share for the current quarterly period were $1.09 compared to diluted earnings per share of $.70 during the prior year quarter.
For the six months ended December 29, 2013, net sales were $161.1 million compared to net sales of $143.1 million during the prior year six month period. Net income during the current year six month period was $7.1 million compared to net income of $5.1 million during the prior year six month period. Diluted earnings per share were $2.00 for the current year six month period ended December 29, 2013 compared to diluted
The success and growth of Strattec are still mostly influenced by the global automotive markets which should sustain ongoing industry growth. The company is poised to continue strongly benefiting from this automotive tailwind. While the improvement in the automotive industry is credited for much of Strattec's strong numbers this quarter, the company also bought a biometric security company called NextLock with the hope of strengthening its position as a security company. The company just completed its 105th year in business; 86 of those years it operated as part of Briggs & Stratton Corp.
STRT is getting into diversification away from autos as well. They are just getting started but this year they will begin to see the impact in their earnings.
Strattec announced that it was honored by Chrysler Group LLC with its 2013 Supplier of the Year award in the Electrical Products Category. Top performing suppliers were recognized at the Annual Strategy Meeting and Supplier Awards Ceremony, held Wednesday June 5, 2013.
All of these accolades don’t mean jack unless they can turn it into profits. For once, I think the ANAL-ysts have this one right. If you take the projected earnings of $4.25 and multiply it by the PE multiple of 18, you get a share price of $76.50 which exceeds my sale price. You get a little more confidence if you listen to their boss, Frank Krejci. It’s hard to pronounce his name, but I think it rhymes with Keasbey:
“We're not the same business. Ten or 15 years ago we were all locks and keys, all mechanical locks and keys. Now we're going more on the electronic side, with push button starts. We've added a lot with driver controls and latches and power access.”
"Over the last 19 years, we have greatly expanded our products and geographic reach in serving the automotive industry," Krejci said. "But we also want to use our assets better and with our business being dominated in the auto-lock and key business for 80 years, we've decided to redefine our business and move to security."
" We are encouraged by the expectations of continued strong automotive production, substantial progress at our VAST China operations and the long-term opportunities with biometric security in both automotive and non-automotive markets through our recent investment in NextLock. We've been doing what we’ve been doing for over a hundred years, and we've been doing well," Krejci said. "We want to bring in new things and stir up that thinking. We need to start to look at things differently. So we are looking at how do we leverage what we are good at?"
“And the other part of it is really psychological because, when you think about it, if you're proud of where you work, what you do, that's a huge part of feeling good about yourself and life in general. And what happens then?
You smile at each other, the day goes faster, you're more productive, you feel better. You go home, you don't kick the dog. It impacts your family. So the whole thing to me is very important.
We're not working just to make a lock cylinder. We're working to be proud that we are a major supplier to the automotive industry.”
What a great place to work. What a great company! What a great stock pick!
With the money I make on this investment, I won’t care if I lose my Keasbeys. I won’t be locked out of my online trading account. I’ll just buy another car.
I am HUGE!
$$$MR. MARKET$$$
1. My keys were in my bathing suit back at the shore house.
2. I wasn’t even driving.
Now cars don’t even have Keasbeys. If you rent a car from Avis, after you use and abuse the rest room there, they give you something that you keep in your pocket, but its not the key to the vehicle. It’s something else. I don’t even know what it is, but I hate them.
If you've unlocked a Town & Country minivan or any other Chrysler vehicle, you've used a product made by Strattec Security Corp. The Glendale company supplies 100% of the keys and locks for Chrysler cars and trucks, and sells large amounts to General Motors, Ford and other automakers as well.
So whether or not you use a key, or something that has replaced a key. The world would go absolutely nowhere without Keasbeys…or without these products made by Strattec.
Today I bought stock in Strattec (STRT) at 62.96. I will sell it in 4 to 6 weeks at 72.59. Here’s why I like Strattec:
It really all starts with the charts. I love this chart. STRT stock price is up 111% in the last 52 weeks, yet its PE is only 19.4. This is the proverbial sweet stock of Wall Street. You get the growth that you covet, yet the earnings generated by the company make this growth sustainable.
This isn’t just about the Keasbey. Something is contributing to this phenomenal growth. The company now makes ignition lock housings, latches, door handles, power sliding doors and liftgate systems for the automotive industry, and keeps searching for — and finding — new ways to position itself as a broader "access system" manufacturer and a supplier of parts for industries even beyond autos. Basically if you are locked out and want to get in, STRT wants a piece of you. Keasbeys only represent about 30% of STRT’s sales – they used to be 75% in 2001.
Strattec was spun off from Briggs & Stratton Corp. as a public company in 1995. Urged by automakers to have more of an international presence, Strattec, in 2000, struck a deal with a privately held German company, Witte Automotive, and formed a partnership that allowed them to pool their resources without merging. Adac Automotive of Grand Rapids, Mich., also privately held, was added to the strategic alliance in 2006. In addition to its Glendale location, includes two plants with about 2,200 employees in Juarez, Mexico, a distribution center in El Paso, Texas, with 30 workers, and about 60 sales and engineering employees in Troy, Mich.
Strattec partnered with a digital lock firm to make biometric security products, which require recognition of a fingerprint to function. The move is expected to let Strattec bring biometrics to its automotive business, as well as diversify it into residential and commercial markets. For example, Krejic said, the partnership allows Strattec to make a key fob using fingerprint recognition, which can deter car theft. Now this is all crap if you ask me. Last month I got locked out of my Houston Nutt apartment because the battery in my fob died. Then the same week, the battery in my Keasbey remote died and I couldn’t get into my Cadillac.
The CEO even admits he wants to make Keasbeys. “Twenty years ago we were sitting around the table saying locks and keys are going to disappear over time. That's happening, where you might have put five on a car before, now you put one or two. And instead of being the primary security device, the mechanical side has become the backup security device.
We've already gone through the major shrinking of the market there. Is there still a need for mechanical? Yes, but instead of five locks, it's one lock. But what's happened is there's been a migration to electronics.”
During the recession three of Strattec’s biggest buyers filed for bankruptcy protection, and the overall auto industry went to the brink of death before being saved by the feds. Since that time Strattec restructured, improved its operations and expanded its product lines, signed various joint venture and alliance agreements which have allowed the company to become a worldwide auto parts supplier. What doesn’t kil you makes you stronger. The restructuring, expanded product lines, and worldwide operations have helped Strattec become a more diversified auto parts manufacturer and has grown its sales and margins in the ensuing years.
Strattec was spun off from Briggs & Stratton in 1995 as an independent company. After the millennium, there were massive changes in the lock and key industry which deteriorated the company’s market share and competitive advantages. Strattec got smart, it was well prepared for the change from basic locks and keys and the diminishing of the amount of locks and keys needed per vehicle, and has transitioned into the electronic key arena as well as expanding its operations into various fields including: Door handles, power doors, trunk latches, lift gate latches, tailgate latches, hood latches, side door latches, ignition lock housings, sliding side doors, lift gates and trunk lids. The trend of growing sales and margins should continue. If you have to touch something to get into something, then you probably paid STRT to do it, unless you lose your Keasbeys. Actually, this is Keasbey:
ANAL-ysts are seeing the same thing and are adjusting their guesstimates. This trend has helped the consensus estimate to trend higher, going from $3.75 a share not long ago to its current level at $4.24. What’s going on?
Net sales for the Company's second quarter ended December 29, 2013 were $81.5 million, compared to net sales of $72.2 million for the second quarter ended December 30, 2012. Net income for the current quarterly period was $3.9 million, compared to net income of $2.4 million in the prior year quarter. Diluted earnings per share for the current quarterly period were $1.09 compared to diluted earnings per share of $.70 during the prior year quarter.
For the six months ended December 29, 2013, net sales were $161.1 million compared to net sales of $143.1 million during the prior year six month period. Net income during the current year six month period was $7.1 million compared to net income of $5.1 million during the prior year six month period. Diluted earnings per share were $2.00 for the current year six month period ended December 29, 2013 compared to diluted
The success and growth of Strattec are still mostly influenced by the global automotive markets which should sustain ongoing industry growth. The company is poised to continue strongly benefiting from this automotive tailwind. While the improvement in the automotive industry is credited for much of Strattec's strong numbers this quarter, the company also bought a biometric security company called NextLock with the hope of strengthening its position as a security company. The company just completed its 105th year in business; 86 of those years it operated as part of Briggs & Stratton Corp.
STRT is getting into diversification away from autos as well. They are just getting started but this year they will begin to see the impact in their earnings.
Strattec announced that it was honored by Chrysler Group LLC with its 2013 Supplier of the Year award in the Electrical Products Category. Top performing suppliers were recognized at the Annual Strategy Meeting and Supplier Awards Ceremony, held Wednesday June 5, 2013.
All of these accolades don’t mean jack unless they can turn it into profits. For once, I think the ANAL-ysts have this one right. If you take the projected earnings of $4.25 and multiply it by the PE multiple of 18, you get a share price of $76.50 which exceeds my sale price. You get a little more confidence if you listen to their boss, Frank Krejci. It’s hard to pronounce his name, but I think it rhymes with Keasbey:
“We're not the same business. Ten or 15 years ago we were all locks and keys, all mechanical locks and keys. Now we're going more on the electronic side, with push button starts. We've added a lot with driver controls and latches and power access.”
"Over the last 19 years, we have greatly expanded our products and geographic reach in serving the automotive industry," Krejci said. "But we also want to use our assets better and with our business being dominated in the auto-lock and key business for 80 years, we've decided to redefine our business and move to security."
" We are encouraged by the expectations of continued strong automotive production, substantial progress at our VAST China operations and the long-term opportunities with biometric security in both automotive and non-automotive markets through our recent investment in NextLock. We've been doing what we’ve been doing for over a hundred years, and we've been doing well," Krejci said. "We want to bring in new things and stir up that thinking. We need to start to look at things differently. So we are looking at how do we leverage what we are good at?"
“And the other part of it is really psychological because, when you think about it, if you're proud of where you work, what you do, that's a huge part of feeling good about yourself and life in general. And what happens then?
You smile at each other, the day goes faster, you're more productive, you feel better. You go home, you don't kick the dog. It impacts your family. So the whole thing to me is very important.
We're not working just to make a lock cylinder. We're working to be proud that we are a major supplier to the automotive industry.”
What a great place to work. What a great company! What a great stock pick!
With the money I make on this investment, I won’t care if I lose my Keasbeys. I won’t be locked out of my online trading account. I’ll just buy another car.
I am HUGE!
$$$MR. MARKET$$$
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