Graham Corporation (GHM): A Bull Case Theory
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We came across a bullish thesis on Graham Corporation on FluentInQuality’s Substack. In this article, we will summarize the bulls’ thesis on GHM. Graham Corporation's share was trading at $51.30 as of July 16th. GHM’s trailing and forward P/E were 46.22 and 109.89 respectively according to Yahoo Finance.
A pump assembly line in a factory, illustrating the scale of the companies heat transfer solutions.
Graham Corporation operates in highly specialized industrial niches where reliability is paramount, delivering vacuum and heat transfer systems for defense, energy, and petrochemical industries. Its critical role in U.S. Navy nuclear submarines and aircraft carriers, supported further by the acquisition of Barber-Nichols, has solidified Graham as an essential part of the defense supply chain.
This acquisition deepened its presence in next-generation propulsion and high-performance systems, positioning the company to benefit from rising global defense budgets and the U.S. Navy’s modernization drive. Graham stands apart not as a commodity manufacturer but as a strategic supplier with long-cycle contracts and high barriers to entry, driven by decades of engineering expertise, rigorous quality assurance, and deeply entrenched customer relationships.
In mission-critical sectors like nuclear submarines, trust—not price—determines supplier selection, and Graham has consistently earned that trust. Its business is characterized by stability and visibility, with a growing multi-year backlog and steady contributions from commercial energy and petrochemical markets.
This backlog, reaching record levels in recent quarters, ensures revenue durability rather than cyclical volatility. Beyond its core defense and energy markets, Graham is quietly positioning itself for the future, developing solutions for small modular nuclear reactors (SMRs), hydrogen, renewable fuels, and expanding into advanced propulsion and aerospace through Barber-Nichols.
Management’s disciplined, capital-efficient approach emphasizes long-term shareholder value and careful integration of acquisitions, reinforcing the company’s industrial resilience. In essence, Graham exemplifies enduring American industrial strength: slow, steady, and built on deep expertise in critical technologies where failure is simply not an option.
Previously, we covered a bullish thesis on Power Solutions International (PSIX) by LongTermValue Research in April 2025, which highlighted the company’s shift toward datacenter power generation and financial transformation. The company’s stock price has appreciated by approximately 98.4% since our coverage. This is because the datacenter growth thesis played out strongly. The thesis still stands as valuation remains attractive. FluentInQuality shares a similar approach but emphasizes Graham Corporation’s critical role in defense systems.
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