KAMAN Corporation (NASDAQ: KAMN)
Wednesday, October 31st, 2007Nearly six months ago, I recommended going long Kaman Corporation (NASDAQ: KAMN). It is up around 51% since that point, so kudos to you if you were crazy enough to follow-up on my recommendation. But I post here today, to share with you great news from the company: It sold its music division. If you remember from the original post, I offered, "Its two other main divisions, Industrial distribution and Music are less impressive to me. I’m going to just toss out Music. If you care, Kaman is the largest independent distributor of musical instruments and accessories. The brand is very solid, but the industry sucks. Kaman could get a pretty penny for this segment, which makes up 18% of revenues. Until they do this, it will continue to drag on margins and growth rates." Kaman recently announced that it sold the division to Fender, where it belongs. This is great news for the margins and growth rates of this stock and should help get this thing over $40 soon.
Home Inns and Hotels Management, Inc ADR (NASDAQ: HMIN) is a Chinese stock that really appeals to me. The company is a China-based economy hotel chain which develops and operates economy hotels across China under its Home Inn brand. Some will have you believe that this is an Olympics play and perhaps it is. I see a bigger picture. Given the expanding Chinese middle class and continued liberalization of Chinese economy and culture, travel and tourism is going to grow exponentially in the country. The availability of a brand that people know provides comfort, cleanliness, and affordability will be a huge opportunity for HMIN and its competitors. I am a big believer in the competitive advantage local companies have in this space. Sure there is intense competition in the larger cities, but we’re seeing HMIN opening some 26 hotels in secondary cities with cheaper land and less competition. This is where exponential growth in China will occur.