This is a reprint of my 25 August 2008 RealMoney column.

Owens & Minor (OMI) is the nation’s leading distributor of medical and surgical supplies to the acute-care market. It’s also a health care supply-chain management company and a national direct-to-consumer supplier of testing and monitoring supplies for diabetics.

Most of its revenue is derived from fees based on a percentage of the value of products distributed, but 32% of its revenue is contracted on the basis of the company’s costs. Its primary competitor in medical/surgical distribution is Cardinal Health (CAH) . In the direct-to-consumer diabetes supply business, its largest competitor is Liberty Medical, a subsidiary of MedcoHealth Solutions (MHS) .

Owens & Minor has been establishing a track record of earnings surprises, beating analysts’ estimates in each of the last three quarters. Analysts are beginning to reward the company with higher full-year 2008 and 2009 estimates, which now stand at

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This article is a reprint of my August 19 2008 RealMoney column.

Can a market leader in clothespins hang short-sellers out to dry? Investors in Jarden (JAH) may soon find out. The company has acquired a portfolio of leading brands in outdoor and consumer products that includes Sunbeam, Oster, Coleman, Rawlings and Mr. Coffee. I think these market leaders, sold in a wide range of stores, are generating more than enough cash flow to service debt and fuel additional growth, making life uncomfortable for their considerable short float.

According to its latest 10K, Jarden is now a leader in a variety of categories, including (deep breath) alpine skis and bindings, snowboarding and snowshoeing, baseballs, bats, softballs and gloves, camping gear, cordage, firelogs and firestarters, soft baits, rods, reels and combos, home canning, home vacuum packaging, matches and toothpicks, personal flotation devices, playing cards, boxed plastic cutlery, selected small kitchen appliances,

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This article is a reprint of my 14 August 2008 RealMoney column

I know, I know … the construction industry should not be touched with a 10-foot pole right now. But the depth of conviction investors have in that belief sends my contrarian side looking for names that might buck conventional wisdom. I didn’t have to look far to find one.

Despite a market capitalization under $800 million, NCI Building Systems (NCS) is one of North America’s largest integrated manufacturers and marketers of metal products for the nonresidential construction industry. With 44 manufacturing facilities located in 18 states and Mexico it sells metal coil coating services, metal components and engineered building systems, offering one of the most extensive metal product lines in the building industry.

The metal-coil-coating segment cleans, treats, paints and slits continuous steel coils before the steel is fabricated for end use. The metal-components segment sells metal roof and wall

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This article is a reprint of my August 12 2008 RealMoney column.

Sometimes you have to wait for a bit of bad news to get a stock at the price you want. I think that is the case with Chattem (CHTT) , a leading niche provider of over-the-counter health care products, toiletries and dietary supplements.

Chattem’s brands include Pamprin, Gold Bond, Selsun Blue, Dexatrim and Bullfrog. About one-third of its sales are to Wal-Mart (WMT - Annual Report) stores. Chattem’s share price has fallen more than 10% since the company was forced to recall several Icy-Hot Heat Therapy products that were providing too much heat and causing burns. With that episode resolved, I think the lower price represents a buying opportunity.

By focusing on niche market segments outside the core product areas of larger consumer product companies, Chattem has built brand equity and leveraged

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This article is a reprint of my 7 August 2008 RealMoney column.

Crown Holdings CCK - Annual Report) looks to me like the type of boring stock Peter Lynch would love. The company’s primary products include steel and aluminum cans for food, beverage, household and other consumer products and metal caps and closures.

Cans and bottle caps certainly don’t sound particularly glamorous. A glance at the recent producer price index report, however, shows that this industry has been steadily gaining pricing power over the last several years.

Year/Year Change in PPI Index for Fruit and Vegetable Canning Industry Click here for larger image. Source: Bureau of Labor Statistics

You may be surprised by how much innovation actually occurs in the business. The company highlights its research and development activities, including the SuperEnd beverage can

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This article is a reprint of my 5 August 2008 RealMoney column.

With consumers under duress, it is likely wise to avoid consumer-discretionary stocks, especially those in companies that sell goods that cost thousands of dollars. But few fortunes are made by following conventional logic, and often investors must look for unconventional opportunities that may be unfairly priced. I think Polaris Industries (PII) may be one such opportunity.

Polaris make all-terrain vehicles (ATVs), snowmobiles and motorcycles and markets them — together with related replacement parts, garments and accessories — through dealers and distributors principally located in the United States, Canada and Europe. Its primary competitors include Arctic Cat (ACAT) , Bombardier and Honda Motors (HMC - Annual Report) .

Polaris shares are down 20% over the last year, as investors appear to expect a slowdown in sales and profits. Yet those metrics are rising. Second-quarter

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On December 4 2007 I wrote a piece called Roll with Landstar, Short CHRW, saying:

“Based solely on sales or operating margins, Landstar (LSTR - Annual Report) is about 35% the size of CH Robinson (CHRW - Annual Report). If it had the same relative valuation, it would trade at $52 per share.

CH Robinson’s forward price-to-earnings multiple is 24.6, compared with 19.3 for Landstar. At 24.6 times estimated 2008 earnings, Landstar would be trading north of $54. Assigning CHRW’s 1.67 PEG ratio (P/E ratio related to its growth rate) to Landstar would give it a $49 value.

CH Robinson has a lofty 16.1 times EV/EBITDA ratio. If Landstar got that multiple, its stock would be $60.”

The day I wrote the article, Landstar closed at $43.02 and CH Robinson was $53.03. Today, they are in a dead heat price-wise, with LSTR at $55.59 and CH Robinson at

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My latest column is up at RealMoney.

New orders for manufactured durable goods in May increased slightly to $213.6 billion, the U.S. Census Bureau announced last week. This was the first increase in three months, and it followed a 1.0% April decrease. Excluding transportation, new orders decreased 0.9%. Excluding defense, new orders decreased 0.6%.

Behind that bland summary, though, is usually a wealth of information that I believe could be useful for picking the best industries in which to invest. This month, the signal was clear. Get defensive. Among a sea of industries seeing declining sales and orders, one stood out for its strength: defense aircraft and parts.

Disclosure: At time of publication, William Trent has no financial position in the companies mentioned in this article.

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My latest column is up at RealMoney.

In a normal economy, shares of Au Optronics (AUO) would be rising as fast as the company’s sales. Instead, sales and cash flow are zooming, and the company has been topping estimates by a wide margin, but shares keep moving sideways and now trade for less than 5 times projected EPS. In time, look for shares to catch up with the growth metrics.

AU Optronics makes thin film transistor liquid crystal display (TFT-LCD) panels and other flat-panel displays, which are used in notebook computers and desktop monitors, as well as in portable consumer electronics devices and LCD televisions. AUO competes primarily with LG Display (LPL) and Samsung Electronics, both of which are larger than AU. Corning (GLW - Annual Report) is also a significant force and is one of the company’s primary suppliers for glass substrates.

The company

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In “Surging Crude Means Picking Shrewd” why did Christopher Zook praise Applied Materials?

“The best idea right now would be Applied Materials (AMAT - Annual Report),” he said.  “We believe there’s a tremendous growth opportunity there in the solar business, as well as the economy begins to recover in 2009 and 2010, they’re going to get strength in their core businesses as well.”

Eventually the semiconductor firms will start ordering again. Meanwhile, solar is too small to register much, in my opinion.

Disclosure: William Trent has a long position in SMH.