The company provides motion control products and systems as solutions for a range of applications in several target markets including aerospace and defense, medical, vehicle, commercial, and industrial. The company designs and manufactures electric motors, electronic motion control components, gear motors, transaxles and traction wheels, control electronics and drives, and optical encoders. It sells its products primarily to original equipment manufacturers utilizing its own sales force, independent sales representatives and distributors.
Allied Motion Technologies Inc. designs, manufactures, and sells precision and specialty motion control components and systems that are used in a range of industries worldwide. It provides electronic motion control products, including integrated power electronics, digital controls, and network communications for motor control and power conversion; and fractional horsepower brushless DC motors for medical, industrial, and commercial aviation applications, such as dialysis equipment, industrial ink jet printers, cash dispensers, bar code readers, laser scanning equipment, fuel injection systems, HVAC actuators, waste water treatment equipment, dosing systems for the medical industry, and textile manufacturing and document handling equipment. The company also offers engineered fractional horsepower permanent magnet DC and brushless DC motors for a range of original equipment applications; and brushless DC motors, including servo motors, frameless motors, torque motors, high speed slotless motors, high resolution encoders, and motor/encoder assemblies for medical equipment, semiconductor, industrial, and aerospace and defense markets. In addition, it provides gearing solutions for the commercial and industrial equipment, healthcare, medical, and non-automotive transportation markets; and fractional and sub-fractional horsepower motors and motorized solutions, including integrated dives, controls, gearing, and feedback devices. Further, the company designs and manufactures motors, gears, and electronic controls for a range of applications comprising medical technology, robotics, cargo aviation, and building technologies, as well as various commercial applications. The company sells its products through its direct sales force, sales representatives, agents, and distributors. Allied Motion Technologies Inc. was founded in 1962 and is headquartered in Amherst, New York.
(Summary) (Company) (Chart)
29 May 2017
1yr Target $30.00
Payout Ratio 9.52%
1yr Cap Gain 14.06%
1yr Tot Return 14.44%
EPS (ttm) $1.05
EPS next yr $1.45
Forward P/E 18.14
EPS next 5yr 25.00%
1yr Price Support $36.25
Market Cap $238.01 Mil
Revenues $243.60 Mil
Earnings $9.60 Mil
Profit Margin 3.94%
Quick Ratio 1.80
Current Ratio 3.00
1yr RevGR 5.79%
3yr RevGR 24.85%
5yr RevGR 17.25%
1yr EarnGR -16.67%
3yr EarnGR 30.14%
5yr EarnGR 4.30%
1yr DivGR 0.00%
3yr DivGR 0.00%
5yr DivGR 10.75%
Allied Motion was founded in January 1939 in Denver, Colorado by Claude Hathaway under the name of Hathaway Instruments Company. The company developed and successfully sold electrical instruments to a number of industries through the 1940s and early 1950s.
In 1955, the Hamilton Watch Company purchased the company from Mr. Hathaway. It was operated as a division of Hamilton until January 1960, when the division was purchased by an investor group composed in part of executives working in the division. The new company was named Hathaway Instruments, Inc. The company became a U.S. public company in 1962 under the laws of Colorado, originally named 5800 Corporation. Within days of incorporation the name of the company was changed to Hathaway Instruments Inc.
In 1982 the name of the corporation was again changed to Hathaway Corporation. By 1995, the company had developed, and was manufacturing and selling instrumentation used to monitor and control the operations of power generating, transmission and distribution facilities of electric utility and process control companies. The company had also established a nascent motion control business. At this time, Hathaway Corporation consisted of two wholly owned subsidiaries, Hathaway Systems Corporation (HSC) and subsidiaries and Computer Optical Products, Inc. The Company’s name was also changed to Hathaway Corporation. The motion control business was organized into two divisions and one subsidiary: Hathaway Motion Control, Hathaway Motors and Instruments and Computer Optical Products, Inc., respectively.
At the end of 2001, Hathaway Corporation consisted basically of the Power and Process business, selling into the electric utility market, and a motion control business operated as a wholly owned subsidiary, Hathaway Motion Control Corporation. In 2002, the company took the decision to focus solely on motion control products and markets. As a result, on July 29, 2002 the company sold its electric utility products division along with the Hathaway brand name to the Danaher Corporation. The day following the divestiture of the Power and Process business, the company completed the acquisition of Motor Products - Owosso Corporation and Motor Products - Ohio Corporation, both manufacturers of permanent magnet DC motors, from the Owosso Corporation.
On November 19, 2002, the company formally changed its name from Hathaway Corporation to Allied Motion Technologies, Inc.
Description of the Business
Allied Motion Technologies Inc. is a global company that designs, manufactures and sells precision and specialty motion control components and systems used in a broad range of industries within their major served markets, which include Vehicle, Medical, Aerospace & Defense, Electronics and Industrial. The Company is focused exclusively on motion control applications and is known worldwide for their expertise in electro-magnetic, mechanical and electronic motion technology. The Company's products and solutions support a wide variety of applications in these markets and include brush and brushless DC motors, brushless servo and torque motors, coreless DC motors, integrated brushless motor-drives, gear motors, gearing, modular digital servo drives, motion controllers, incremental and absolute optical encoders, and other associated motion control-related products.
Allied's growth strategy is focused on becoming the motion solution leader in their selected target markets by leveraging their “technology/know how” to develop integrated precision motion solutions that utilize multiple Allied Motion technologies to “change the game” by enhancing and optimizing the operation, performance and efficiency of their customers’ products and manufacturing equipment. The Company's goal is to grow sales with a larger base of customers, new applications and technologies, and increased market share globally and within targeted markets.
Allied designs and develops products within their Technology Units and the Company can manufacture these products in various facilities located in the US, Canada, Mexico, Europe and Asia. They also operate Allied Motion Solution Centers that apply all Allied Motion products to create integrated motion control solutions for our customers. They sell their products and solutions globally to a broad spectrum of customers through their own direct sales force and authorized manufacturers’ representatives and distributors. Customers include end users and original equipment manufacturers.
Allied Motion Technology's products and solutions are applied broadly to support a wide range of applications several served markets. Examples of applications in these markets that use Allied Motion components and systems include the following:
Vehicle: Electronic power steering and drive-by-wire applications to electrically replace, or provide power-assist, to a variety of mechanical linkages, traction/drive systems and pumps, automated and remotely guided power steering systems, various high performance vehicle applications, actuation systems (e.g., lifts, slide-outs, covers, etc.), HVAC systems, solutions to improve energy efficiency of vehicles while idling and alternative fuel systems such as LPG, fuel cell and hybrid vehicles. Vehicle types include off/on-road construction and agricultural equipment; trucks, buses, boats, utility, recreational (e.g., RVs, ATVs (all-terrain vehicles)), specialty automotive, automated and remotely guided vehicles, etc.
Medical: Surgical robots, prosthetics, electric powered surgical hand pieces, programmable pumps to meter and administer infusions associated with chemotherapy, pain control and antibiotics, nuclear imaging systems, radiology equipment, automated pharmacy dispensing equipment, kidney dialysis equipment, respiratory ventilators, heart pumps, and patient handling equipment (e.g., wheel chairs, scooters, stair lifts, patient lifts, transport tables and hospital beds, etc.).
Aerospace & Defense: Inertial guided missiles, mid-range smart munitions systems, weapons systems on armed personnel carriers, unmanned vehicles, security and access control, camera systems, door access control, airport screening and scanning devices, etc.
Electronics and Industrial: Products are used in the handling, inspection, and testing of components and final products such as PCs, gaming equipment and cell phones, high definition printers, tunable lasers and spectrum analyzers for the fiber optic industry, test and processing equipment for the semiconductor manufacturing industry, factory automation, specialty equipment, material handling equipment, commercial grade floor polishers and cleaners, commercial building equipment such as welders, cable pullers and assembly tools, etc.
My Path Forward
There's just too much potential here to pass on this investment. The only real decision is how to enter this position. With a beta of 1.81 and support in the high teens, it might be prudent to only accumulate shares at prices of $20 per share or lower. I also believe that these shares will easily reach $30 per share in the next 12 months with the possibility of rising to nearly $36 per share. On a pullback to the upper teens, this could potentially constitute a doubling in price. That's an investment that anyone would like.
If I have any apprehension it's with the debt load. A debt to equity of 0.90 is pretty high, but they've been working the debt over the last few years. As debt has fallen, equity has risen and I expect that to continue going forward. Assuming that happens, the fundamentals will become increasingly desirable.
I'm also aware this is a company that sells into an increasing economy so as an investor I'll have to be aware of the overall economy. Today that looks good but that could change in the future. But all things considered, I expect to start a position in this company upon any pullback. It's one year total return is something I just can't pass up.