A Cooling Play That's Heating Up

York International is a creation of the 1980s. Spun off by parent Borg-Warner in 1986, York became a publicly traded company only to be swallowed up two years later by an investor group in a leveraged buyout. Well, guess what? York International, maker of heating, air-conditioning, and refrigeration products, is back, taken public again last October by its owners at $23 a share. The surprise is that even though York's business is tied to housing and construction, its stock has been doing very well indeed--trading now at 34.

The investors who helped hoist it there may have noted 1991's record sales of $1.6 billion, with operating earnings of 56 a share. Plus, if some pros who are buying are right, the company's outlook is rosy in spite of the recession. "We see earnings improvement ahead," says Kemp Fuller of New York's RAS Securities. His estimates: $2.10 a share in 1992 on projected sales of $1.8 billion, and $2.75 in 1993 on sales of $2.1 billion.

What's York's secret? Some 40% of its business comes from overseas. Also, 70% of its total business is in commercial refrigeration, where the major customers are in the noncyclical food and beverage industries. York sees more growth abroad, specifically in the Pacific Rim countries, as well as in Latin America, where demand for refrigeration and ventilation equipment is strong. Fuller figures the stock will hit 55 over the next 12 months.

Before it's here, it's on the Bloomberg Terminal.