Few days ago, I relate a case study when I shared my perspective on price earnings ratio. You can read it here. I wrote:

The earnings and cash flow are recurring, but most of the time the PE is around 20 times, and when you pay out 5% or so dividend, this looks good.

The long term growth rate of the industry is 5% so if you look at it from a 5 year or 10 year perspective, it doesn’t look a value purchase, but for a consistent earnings business over 20 years its not bad.

You also learn the story of a possible one or two bad years when in the past year, it bleed negative free cash flow.

Apparently what was a really good recurring business, the OEM players are looking to edge in as well. And the OEM held a lot of the pricing power.

Is this ...