The Road to Kaydon – Debra Fiakas, CFA

 

Most investors with an interest in the alternative energy industry think first of the energy source  –  solar, wind, geothermal or biofuel.  There are other roads to access the returns promised by the shift from fossil fuel to alternative sources.  But do not waste time as these gems are in the sights of strategic buyers as well.

Kaydon Corporation (KDN:  NYSE) produces components and sub-systems used in the alternative energy industry.  Its friction control products are critical for the efficient operation of wind turbines and blades.  These products include large diameter turntable bearings and specialty balls.  The company also makes fuel cleansing systems and air filtration systems.  The company reported $55.4 million in sales to customers in the wind energy sector in 2012, in-line with 2011 sales of $54.3 million but well off the sales levels in the previous years  – $103.0 million in 2009 and $95.9 million in 2010.  Despite the drop in sales to the wind energy sector, it still represented a solid 12% of total sales.