Albany International (NYSE:AIN) is a $1.7B advanced textiles and material processing company trading 22X Earnings, 2.1X Sales and 3.33X Book with a 1.25% dividend yield.
AIN grew revenues 9.9% in 2016, its best growth year in more than 10 years and targets 5-8% annual revenue growth through 2019 with EPS forecasted to hit $2.88/share in 2019, a strong gain from $1.84/share in 2016.
Two Distinct Business Segments that Compliment Growth & Value
Albany International (AIN) operates in two distinct businesses, Paper Machine Clothing and Aerospace Composites (AEC). The Machine Clothing business lacks growth as a mature market where AIN is a global leader, but does generate strong cash flows. Its engineered composites business is emerging with strong growth. AIN forecasts the Engineered Composites business can hit $450M to $500M in revenues in 2020 after posting $198M in 2016. This could bode well for Albany International’s stock price further out.
The Machine Clothing segment is seeing negative demand for paper from Printing and Newsprint while Tissue and Containerboard demand is rising, offsetting to a low total paper demand growth for the foreseeable future. Albany International has a 30% market share that is 2X its next largest competitor. The AEC segment is looking to become the broadest and most capable supplier of advanced composite parts in the aerospace industry. Its major programs include the LEAP Fan Module for Safran, the F-35 Airframe for Lockheed Martin, and 787 forward fuselage frames for Boeing.
Albany International stock (AIN) is not well followed on the Street and has seen very little analyst attention. Shares have gained 17.6% YTD, and recently shown momentum on increased volume breaking out of a small bull flag and aiming to reach $60 in its channel up pattern. Optimal entry would be on a move back to test the $49 level.
Albany International Corp (AIN) Stock Chart
In closing, AIN is a global market share leader in a stable business providing ample cash flows and minimal potential for downside, while its AEC division is an exciting growth story. I think this combination makes it an attractive longer term investment. Thanks for reading.
The author does not have a position in the mentioned security at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.