Since Jan. 2, Milacron Inc.'s stock has taken off, soaring 30-plus percent to crack the $20 barrier for the first time in a year and a half.
Meanwhile, overall manufacturing has sunk to a 10-year low, plastics equipment sales remain flat and economists are talking recession.
What's going on?
According to two stock analysts, investors are looking past this lackluster year. Buyers view Milacron as a bargain-priced manufacturer ready to come on strong when the economy does bounce back, they said.
With a few exceptions, the stock has held to a range of $13-$16 for the last year. On Jan. 2, Milacron closed at $15.40, then began a steady run to crack $20 on Feb. 9, when it closed at $20.34.
Analyst Walter Liptak of McDonald & Co. in Chicago, upgraded Milacron to a buy, from a hold, on Dec. 1.
"The idea is that we know we can already kind of throw in the towel on it for this year. In a recession a lot of companies are going to do poorly," he said. "But with [interest] rates coming down, we look forward to a recovery in 2002. And we think Milacron's in great shape to benefit from that recovery."
Milacron's 2000 financial numbers were solid, but not spectacular. Companywide, sales for the maker of plastics machinery and metal-cutting products reported sales declined by 2.5 percent, while profit improved by 3 percent.
Another Chicago-based analyst, Alexander Paris Sr., said Milacron's stock has experienced its own two-year recession. Paris and Liptak agreed that Milacron has cut costs to improve the long-term outlook.
For investors, Paris said: "The bad news is out and they're willing to look over the valley."
He said Milacron will have a difficult time in the first half of 2001. "But that's all known, bad news. On the other hand, the Federal Reserve is committed to easing money ... and there is a strong likelihood of a tax cut," Paris said.
Meanwhile, the Cincinnati-based company faces a changing of the guard. Milacron said Feb. 9 that Ronald D. Brown was elected chairman and chief executive officer, effective June 1. He replaces longtime top executive Daniel J. Meyer, who turns 65 at the end of May and will retire.
Brown moves up from president and chief operating officer.
Meyer will stand for re-election to the board of directors at Milacron's annual shareholders meeting April 24.
John C. Francy was promoted to treasurer.