Jarden: Fruit to Coins

09/25/2002 12:00 am EST

Focus:

Jim Collins

Chairman and CEO, Insight Capital Research & Management, Inc.

Momentum investing is based on the theory that strength begets strength.  Jim Collins is a master at this practice, having developed one of the most successful long-term track records in the business. He describes his approach as a funnel, in which thousands of stocks are poured in at one end, and then subject to a variety of proprietary screens. Only a limited few survive the process and only the strongest potential stocks come out at the end of the funnel. In his newsletter, Listed Insight, he describes the latest “survivor” of his screening process.

Jarden (JAH NYSE) is the nation’s leading provider of products used in home food preservation. Its consumer products division is the leading provider of home canning and related products, primarily under the Ball, Kerr, Fruit-Fresh, and Bernardin brands. The company has developed a proprietary two-piece closure system  that differentiates its jar lids from its competitors'.”

“The company’s other division is the materials-based group, which consists of injection molded plastics. Its zinc items are used in plumbing, automotive, electrical components, and lifejacket anti-corrosion systems. It is also the nation’s largest producer of zinc strip and fabricated products that are used in coin blanks for the United States and foreign mints.”

“The stock has been moving on a steady uptrend for the last year. The stock dipped slightly in late July, but hit a new 52-week high on August 30. For the second quarter, Jarden reported better-than-anticipated sales. Net income was $-0.56 a share compared to $0.40 for the same period a year ago.”

“Jarden has carved out a specialized, targeted niche. The company concentrates in markets that require high levels of precision, quality, and engineering expertise. There is potential for growth in all product lines, especially where quality, service, and molding operations are competitive factors.”

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