TBL’s balance sheet is strong with $125 million in cash and no debt. The company generates close to $160 million of free cash flow. Insiders own approximately 27% of outstanding shares. There is something very interesting going on with the shares outstanding over the past fifteen years. Currently there are sixty-four million shares outstanding, which are twenty million fewer shares than in 1990. The company continues to buy back its shares and I am wondering if the management might be planning to take the company private over the next several years. TBL’s pipeline of new products should give a boost to earnings and sales over the next several years. TBL is a good company, and a price of $25 or less per share represents a very good value. If TBL can grow earnings at only 12% per annum (a margin of safety that is 40% lower than its past-five-year EPS growth rate of 20% per annum) and maintain a P/E of 11, the stock will reward investors handsomely over the next five years.

MSM has recently acquired J&L Industrial, which will give the company a presence in the United Kingdom and allow it to be not as reliant on the U.S. for revenues and earnings. Over the past five years, MSM has been actively building a strong sales presence on the West Coast, especially in San Diego and Oakland, California which in turn will show up in higher revenue and earnings in years to come. Net profit margins have more than doubled, from 4.5 percent in 2001 to 10.2 percent in 2006. Return on equity, a good measure of how well management is performing, increased to 21 percent and has been trending higher over the last five years. MSM also has virtually no debt. Owners and directors own more than 20 percent of the common stock, so this is a company that “eats its own cooking.” MSM is a good company, and a price of $39 or less per share represents a very good value. If MSM can grow earnings at only 15 percent per annum (a margin of safety that is 56 percent lower than its past-five-year EPS growth rate of 34 percent per annum) and maintain a P/E of 16, the stock will reward investors handsomely through the next five years.

GGG has a 44% return on equity, and it has consistently been above 40% for the past several years. The company has a small amount of debt ($25 million line of credit) which is probably paid off by now. The net profit margins are over 18% and the numbers of outstanding shares has dropped from 82 million shares in 1990 to 66 million in 2006. This is a solid company with increasing demand for its products. GGG is a good company, and a price of $36 or less per share represents a very good value. If GGG can grow earnings at only 14% per annum (a margin of safety that is 26% lower than its past-five-year EPS growth rate of 19% per annum) and maintain a P/E of 16, the stock will reward investors handsomely over the next five years.

Net profit margins have been increasing from under 2% just a few years ago to over 4% in 2005 and trending higher. WSO is starting to buy equipment from China which should help boost their margins even further. Debt is only 10% of total capital and is very manageable and will most likely head lower over the next few years as WSO’s cash flow continues to increase. Return on Equity (ROE) of 17% points to efficient management. WSO is a good company, and a price of $39 or less per share represents a very good value. If WSO can grow earnings at only 13% per annum (a margin of safety that is 55% lower than its past-five-year EPS growth rate of 29% per annum) and maintain a P/E of 12, the stock will reward investors handsomely over the next five years.If WSO can grow earnings at only 13% per annum (a margin of safety that is 55% lower than its past-five-year EPS growth rate of 29% per annum) and maintain a P/E of 12, the stock will reward investors handsomely over the next five years.

The numbers that FRK has been able to produce in the past several years have been excellent. Net-profit margins have increased steadily from 9.7 percent in 2001 to 13.6 percent for fiscal 2005. Sales and earnings both have been compounding at double-digit rates in the past five years. The recent halt to residential construction has hit the stock price of FRK hard, and in my view it seems a bit overdone. FRK is not solely reliant on residential construction but does an extensive amount of business in the commercial and public infrastructure area. FRK also has a competitive advantage when it comes to its aggregate business. There is a very time consuming permit process, and strict EPA regulations make it difficult for competitors to come into the market and take market share from FRK. In addition FRK is a family-owned and operated business. The Baker family owns more than 25 percent of the common stock and the chairman of the board and president are Baker family members. FRK is a good company, and a price of $35 or less per share represents a very good value. If FRK can grow earnings at only 14 percent per annum (a margin of safety that is 39 percent lower than its past-five-year EPS growth rate of 23 percent per annum), maintain a P/E of 10 and decrease its dividends to only 15 percent of earnings, the stock will reward investors handsomely through the next five years.

CRR has a very healthy balance sheet with $60 million in cash and short-term investments. The Company has no long-term debt. The Company’s net profit margin over the past five years is 18 percent, which is well above the oil and gas operations industry average of 14 percent. Management holds more than 35 percent of the shares outstanding. CRR also has 40 percent of the ceramic proppant market, more than double the share of the next largest competitor. CRR is a good company, and a price of $46 or less per share represents a very good value. If CRR can grow earnings at only 15 percent per annum (a margin of safety that is 21 percent lower than its past-five-year EPS growth rate of 19 percent per annum) and maintain a P/E of 20 (a margin of safety that is 17 percent lower than the current P/E of 24), the stock will reward investors handsomely over the next five years.

KSWS has a very healthy balance sheet with $197 million in cash and no debt. The company’s net profit margin over the past five years is 13%, which is almost double the industry average. Management has done an outstanding job, as return on equity over the past five years averages more than 29% per annum. KSWS has been expanding in the international markets, where growth has been strong. The company recently formed a distribution relationship in Japan that should fuel its Asian business. KSWS is a good company, and a price of $29 or less per share represents a very good value. If KSWS can grow earnings at only 15% per annum (a margin of safety that is 65% lower than its past-five-year EPS growth rate of 43% per annum) and maintain a P/E of 13 (a margin of safety that is 7% lower than the current P/E of 14), the stock will reward investors handsomely over the next five years.

LRW is the market leader in a fragmented industry. It is the largest supplier of on-demand manual labor with branch locations in the U.S., Canada and the U.K. LRW’s May 2005 purchase of CLP Resources makes it one of the largest companies focusing exclusively on skilled trades staffing. Return on equity has been improving over the past three years and was 19% in 2005. LRW is in an industry that has been growing over the past years as more companies use temporary labor during peak seasons, which keeps overhead down. LRW also has very little debt. LRW is a good company, and a price of $22 or less per share represents a very good value. If LRW can grow earnings at only 18% per annum (a margin of safety that is 66% lower than its past-five-year EPS growth rate of 54% per annum) and maintain a P/E of 15 (a margin of safety that is 25% lower than the current P/E of 20), the stock will reward investors handsomely over the next five years.