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COPYRIGHT 2003 Adams Business Media
When financial markets sink into uncertainty, savvy investors look for safe havens in industries that are the least likely to suffer with the rest. Industry analysts say that companies involved in the highly-fragmented filtration and purification markets may well prove to be more resilient than others. Replacements are the key to the industry's stability in a weak economy. While sales of new filtration and purification equipment may slow down, filters in existing equipment still must be replaced regularly. New products and new regulations that require improved emission controls also boost the prospects for some companies.
Broadly, the filtration industry is separated into two categories, according to James Gentile, an analyst at Sidoti & Co., an independent research firm. It can be further broken down by end-user categories. These include healthcare, water filtration, microelectronics, aerospace, HVAC, pollution control and engines. "It's a very attractive business model in that there is a lot of repeat after market business," says Gentile. "Your air filter in your car needs to be changed as often as you change your oil. Heating ventilation and air conditioning filters need to be changed every six months. Oil, hydraulic and liquid filters need to be changed regularly. Regardless of the macro environment, you need to maintain your existing equipment."...
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