Published: June 8, 2009
The
correct answer is 
(C) Middleby (MIDD)Middleby
manufactures pizza ovens, stoves,
fryers and other commercial cooking
equipment. It does business with
hotels and convenience stores, but
the firm's core customer base is
fast-food and casual dining chains.
There are no less than 750 different
companies vying for a piece of this
business, but Middleby sells more
than most of them combined.
Middleby enjoys the No. 1 position
across 20 different product lines
and controls roughly 30% of the
domestic market. Thanks in part to a
massive base of 850,000
establishments in constant need of
equipment upgrades, the commercial
cooking-equipment industry hasn't
seen a single annual sales decline
in the past 30 years. And many
foreign markets are even more
attractive. For example, Yum Brands
(NYSE: YUM) is introducing a new KFC
restaurant to China every day and
ultimately plans to have 20,000
fast-food outlets in operation there
-- all of which will need an array
of cooking equipment.
Fortunately, all this has been
reflected in Middleby's astronomical
growth rates. Since 2001, sales have
jumped more than six-fold and
profits have been climbing at a
torrid +80% compounded annual pace.
More importantly, shareholders have
earned a flame-kissed +1,700% gain
over the same time.
As you can see, good things happen
to companies that find ways to
capture market share. And these
aren't just isolated examples. Even
in a relatively small industry, an
increase of 1 or 2 points of market
share can mean tens of millions more
to the bottom line. And, of course,
market share leaders generally enjoy
economies of scale, bargaining power
over suppliers and other important
perks.
With all this in mind,
StreetAuthority editor Nathan
Slaughter has scrubbed the market
for companies that been dealt great
hands and are fighting for big
stakes. In the latest issue of
Half-Priced Stocks, Nathan offers a
hand-picked short list of companies
that are expanding their turf and
have favorable industry fundamentals
at their back. He also provides
in-depth profiles two of his
favorites, both of which sport
double-digit price-appreciation
potential. To learn the names of
these stocks, and to learn more
about Half-Priced Stocks,
please visit this link.
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