Tricorn joins research list

I like the look of pipe and tube manufacturer Tricorn (TCN). It’s small, profitable, confident, and investing.

Tricorn acquired two businesses in 2006 and 2007 but survived the credit crunch without making a loss. Earnings recovered immediately and have grown since. It’s a small company that owns four even smaller ones supplying the power, mining, oil and gas, automotive and aerospace industries.

Tricorn’s strategy emphasizes the common-sense virtues of high quality, low cost, maximum efficiency, niche markets, and cautious acquisition. In today’s Full Year results the company confirmed it’s opening a factory in China, where it already sources products, by the end of the year.

Management is stable and experienced. Chief executive Mike Welburn joined in 2003 after 18 years at IMI, a much larger engineer. He became chief executive in 2007. The finance director came from Rolls Royce in 2009. Roger Allsop, a non-executive director, owns nearly 33% of the shares having bought Malvern Tubular Components in 1984 and run Tricorn until 2002.

It could be a profitable financially sound company growing slowly in a competitive market, a mini-stalwart that investors are overlooking because of its small size and its dull but essential work.