Boring Can Be Valuable...and Profitable


Marc Gerstein Image Marc Gerstein Editor, Forbes Low-Priced Stock Report

Marc Gerstein of Forbes Low-Priced Stock Report finds an undiscovered bargain in the transportation industry.

Assuming we don’t blow up over a federal debt-limit standoff or some other political issue, if the equity market is to have a decent time of it in 2013, an improving economy will have to be an important part of the picture.

We don’t need a boom; slow growth will be fine as long as we just have growth. And if, indeed, that turns out to be the case, basic industrial stocks, such as Supreme Industries (STS), should turn out to be good stocks to own.

The company’s business—truck and bus bodies—is pretty boring, but for investors, boring can be highly desirable. Indeed, the first two qualities set forth by Peter Lynch in One Up on Wall Street says the perfect stock was (1) “a perfectly boring name” and (2) a company that “does something boring.” STS is well qualified in both respects.

The truck and bus bodies produced by the company are attached to a truck-grade chassis (consisting of an engine, a frame, wheels, and sometimes a cab) manufactured by others. Think of it this way: An automotive company makes the bottom. STS makes the top.

When it comes to truck bodies, they are not comparable in scale to the big 18-wheelers you see on highways, which are detachable trailers instead of bodies permanently affixed to the chassis.