StockBoxPicks Updates: ANW, EXAC
By Chandler Lutz
October 10, 2007
A lot of things have happened since our recommendations of Exactech and Aegean Marine Petroleum. Those of you who have been following these firms know that some exciting things have occurred since we recommended these companies, especially Aegean.
Aegean Marine Petroleum, a fuel logistics company, has made a huge run since we first wrote about it. Most of this run can be attributed to a buy recommendation by an analyst at the firm Jefferies & Co. Also, the company received very favorable coverage from the Investor’s Business Daily in a recent article. It’s quite amazing how much a company’s price can rise when the business’s dynamics haven’t changed. It just shows how undervalued ANW was at the time.
Additionally, Exactech has seen very favorable press. On October 10, 2007, the investment firm Noble Financial Corp. initiated coverage on the orthopedic implant manufacturer with a buy rating. At StockBoxFinancial we don’t place too much emphasis on analysts’ buy and sell recommendations, but as Exactech grows more favorable press will continue to come out of the company. The best press recently for this micro-cap firm came from the country’s most prominent financial newspaper, the Wall Street Journal. In an article, the Journal was talking about small firms that treat employees extremely well. Here’s what the newspaper had to say about Exactech:
Training at many companies revolves around teaching employees to perform their current jobs better. At Exactech Inc., it's also about preparing employees to get a better job.
Every new employee is required to take orientation courses on company culture and reading corporate financial statements. But training is a continuing process, where employees are often asked to push themselves to new levels -- in terms of both their knowledge and their interpersonal skills.
"We're such big believers that the people, if they don't have the expertise, won't be happy," says Chief Executive Bill Petty, an orthopedic surgeon who co-founded the company in 1985 with a bioengineer, Gary Miller, now the company's executive vice president of research and development.
In late 2005, the company introduced Exactech University -- a series of about 20 free short courses taught by Exactech employees on topics including customer service, listening skills and project management, along with product training. And the company often brings in outside speakers or pays for employees to take online and off-site courses when in-house expertise isn't available.
An employee's training regimen depends in part on his or her employee-development plan -- a document updated at least twice a year by the employee and his or her supervisor that lays out the employee's key development area and an "action plan." Sometimes an action plan includes reading a book on a particular topic, such as effective communication. An on-site library has books, professional journals and audiotapes that employees can check out. All employees have a development plan unless they sign a document opting out.
Anacielo Vale-Grogan, a 34-year-old senior forecasting manager, wanted to learn French so she could communicate better with representatives from the company's large French distributor. Exactech paid for her to take weekly French lessons and recently sent her to France for a six-week language course. "I think it's pretty unique how much they focus on individual development here," she says.
To identify potential leaders, company managers are asked for confidential assessments of some employees. The company then invests a lot of time equipping those most promising employees with great leadership qualities. Exactech employees with at least one direct report are asked to attend a meeting every six weeks, where they break into groups to discuss issues like employee recognition, problem solving and meeting facilitation.
In 2006, the company hired an outside facilitator to host a yearlong course on emotional intelligence for 23 team leaders and promising employees that addressed issues such as self-awareness and dealing with other people.
"Especially as people rise to higher levels in organizations, their ability to do their job effectively depends on emotional intelligence qualities more than technical qualities," Mr. Petty says. (You can check out the WSJ article here)
We did not include this in our original analysis, but it just fortifies the fact that Exactech is a great firm and has excellent potential going forward.
The news and results of Aegean and Exactech going have been quite satisfactory up to this point, and we will continue to monitor them in the future to ensure they remain quality investments.
Chandler Lutz owns shares of Exactech and Aegean Marine Petroleum