AAON, Inc. AAON

A number of stocks traded up in the afternoon session after Treasury yields eased and crude oil prices fell amid U.S. and Iranian talks on reopening the Strait of Hormuz.

Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the industry’s six-month return of 4.9% has fallen short of the S&P 500’s 18% rise.

AAON has pulled back in recent months, even after upbeat headlines around its heating and cooling business, which puts fresh focus on what investors are really paying for its earnings today. With the share price near US$75.54 after a weak short term run, the central issue is how that quote lines up with the profit power of the underlying operations. Over the past 5 years the stock has gained 77.0%, so anyone looking at AAON now is weighing a strong longer term run against the income stream...