Guy Gottfried will be speaking at the upcoming Value Investing Congress taking place May 6th & 7th in Las Vegas. To learn more please visit www.ValueInvestingCongress.com/VIL.

Canam Group (TSX: CAM) is a construction product manufacturer with 20 plants throughout North America. It is the largest steel joist and deck maker in Canada with market share of some 75% and is number three with a 15% share in the US market. Canam is also the largest Canadian player in the steel bridge market. The company’s stock trades at $5.40 and it has a market cap of $227 million. (All dollar figures in this article are in Canadian dollars.) Canam is a superbly managed business valued at a low single digit multiple of normalized, or mid-cycle free cash flow (FCF).

Although it is a Canadian firm and trades on the TSX, Canam’s US operations account for some two-thirds of its business in a normal environment. Those operations have suffered due to the US economic slowdown, thereby depressing Canam’s results and its stock price. However, this year has shown signs of improvement, with year-to-date EBITDA having risen to $37 million compared to $4 million last year. As this rebound continues, earnings and free cash flow will soar.