This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

January 27, 2012 - Cascade Corporation, (CASC-NASDAQ) together with its subsidiaries, engages in the manufacture and distribution of materials handling load engagement devices and related replacement parts primarily for the lift truck and to construction industries worldwide.

Its lift truck related products provide the lift truck with the capability of engaging, lifting, repositioning, carrying, and depositing various types of loads and products. Construction related products allow vehicles, such as loaders, backhoes, and rough terrain lift trucks to move materials in much the same manner as conventional lift trucks, and are used on excavators and loaders for conventional and specialized ground engagement applications.

The company sells primarily under the Cascade name to the end-users through the retail lift truck dealer distribution channel; lift truck manufacturers as original equipment manufacturer (OEM) equipment; and lift truck original equipment dealers. It serves pulp and paper, grocery products, textiles, recycling, and general consumer goods industries, as well as OEMs of construction, mining, agricultural, and industrial vehicles. The company was founded in 1943 and is headquartered in Fairview, Oregon.

Thought still small (market cap of $635.82 million), CASC is one of the world's leading manufacturers of materials-handling, load-engagement devices and related replacement parts. The stock moved up rapidly in the last week and has been on an upward trend since last October when it traded at $31.30. Can it go still higher?

Third quarter results give us a good clue (fiscal year ends January 31). Sales were up 28% in the period to $138 million with higher global lift truck sales in every operating region. With solid demand, price hikes went into effect and stuck. Europe remained a bright spot, and for the third consecutive quarter showed a profit.

Margins improved because prices were higher, cost cutting initiated earlier in the year began to take effect, and better fixed-cost leverage. They were hampered by higher raw materials costs. But in total, they widened.

As for earnings, they more than doubled to $1.74 compared to 79 cents in 2010's third period. Analysts forecasted $1.20. Actual EPS beat that by 45%. In the first quarter, results bested analysts' expectations by 78% ($1.46 vs expected 82 cents).

For the fourth quarter, consensus from 4 analysts is for $1.09 compared to 65 cents in the year prior's fourth. For the full year, they see $5.51 vs $2.24 in 2010. For 2012, they're expecting $5.51 again, so no growth in earnings is forecast currently. Europe is still a big question (and a big market). While Germany and France continue to show decent strength, the rest of the EU with Greece most notable are on shaky ground. Analysts will lift their estimates if the European economies show some debt resolution and positive traction.

Along with better earnings, the company improved the dividend, boosting it to $1.00 after hiking the payment twice last year. That compares to an 18 cent pay out in 2010. For more uses of its healthier cash flow, management has also stated it's on the lookout for acquisitions to help growth.

- Essential numbers:
- Price to sales ratio: 1.22
- Price to book value: 2.14
- Operating margin: 15.36%
- Profit margin: 10.3%
- Return on equity: 19.85%
- Return on assets: 12.94%
- Total cash: $19.8 million
- Cash per share: $1.79
- Total debt: $22.73 million
- Total debt to equity: 7.65%
- Current ratio: 3.67
- Book value per share: $26.83
- Beta: 2.25
- 52 week change: 17.3%
- Shares outstanding: 11.08 million
- Float: 8.46 million
- Insiders own: 24%
- Institutions own: 71.6%
- Yield: 1.8%

Some of the above numbers are comforting (like very low debt level, very high insider ownership). Some are disturbing (beta of 2.25, very low float). While the P/E is relatively benign, the price to book is getting a little stretched. Risk oriented investors will find this an interesting story and will want to spend more time with CASC.