Thursday, October 18, 2012

Jim Cramer Tonight Visits Timken

CNBC's own Jim Cramer is in Ohio today, and will do his show "Mad Money" from there this evening (6:00 PM US ET and 11:00 PM US ET), one of the Ohio companies he will discuss is US rolling bearing manufacturer Timken (ticker: TKR).  Here is a (daily prices) six month chart (and source) of TKR's price movement over the last six months:

http://www.freecharts.com/stocks.html?page=chart&sym=TKR

(Click on either image for a better view)


The below chart shows TKR's weekly prices (same freecharts.com):


There, that should take care of it.  I stored the two graphs as .jpgs using MS Paint...

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Timken is approximately the world's third largest bearing manufacturer, Timken invented the tapered roller bearing.  That type of bearing accounts for about 22% of our 2012 (actually that would be a bit higher, as there are tapered roller bearings included in some of our hub & bearing assemblies).  "'trb" is our internal coding for tapered roller bearings.  2012 sales figures are as of October 12, both other years (2010 and 2011) are full year sales figures.


B_TYPE
Total Sales
2010
2011
2012
bb
$1,876,725.65
$584,071.73
$610,880.49
$681,773.44
bdr
$5,744.54
$376.37
$3,043.70
$2,324.47
op
$10,741.39
$3,556.48
$5,952.30
$1,232.60
or
$187,871.37
$88,085.49
$61,003.83
$38,782.05
trb
$676,018.75
$223,342.72
$241,130.67
$211,545.36


(FYI, "bb" is our coding for ball bearings, which for us and worldwide are the biggest selling type of rolling bearing, ball bearings sell even higher for us than is typical, as the Daewoo Tico uses ball bearings in its wheels (vs. tapered bearings), and the "Tico" cars represent some 15% of our bearing sales).

***

Timken is a company that I do not closely follow, as they have declined to sell to us in Peru.  Their prices are also very high, which is a big deterrent in Peru to selling well.

Timken has, at various times, declined to sell to us.  So, "we dance with who brung us: KOREA!"  The Koreans treat us better than my own country's only world-class manufacturer.

While acknowledged as "perhaps" the world's highest quality bearing (we do not have that kind of laboratory handy, so we cannot know), Peruvians (for the most part) are NOT willing to pay some 20% higher prices than a comparable Japanese piece.  And Ameru has pretty much abandoned even importing JAPANESE bearings, as the price competition is already so brutal.

Timken has a fairly small share in Peru, certainly in automotive bearings.  Timken is very respected in industrial applications (including mining, BIG BUSINESS in Peru) and is desired by owners of, say, US-made trucks as replacement bearings as well as machinery. But, Peru is NOT a manufacturing powerhouse.

***

I do not really have a comment on Timken shares as an investment.  The stock does pay a dividend, and has for a long time, a point of pride (and of course, a big plus) for them.

Timken, at least in the past, had to beg for TARIFF protection vs. "the big, bad foreigners" while claiming (as the US Department of Commerce did) that they were the world's most efficient producer of tapered roller bearings.  Timken's plants are typically unionized, a big red flag for me.

***

I have been somewhat derelict in my duty as a bearing buyer in keeping a close eye on Timken.  I will pay some more attention to them.  Particularly if they will open up to selling to Peru's fourth largest independent bearing importer...

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