MTW - Sector: Capital Goods - Industry: Constr. & Agric. Machinery

[bjc]

MTW is making all the cranes for the expansion in China.  

They made $0.76 last quarter, I expect this to be matched and exceeded in each of the next quarters, making MTW very cheap at $46.50.  I bought just now at $46.50.

So if they make $3 in the next year, the PE will be 15.  Deserves a higher valuation.  I'll sell closer to $100 than $50.   The street is catching on to everything that capitalizes on the huge growth in China.  MTW has seen some nice stock price appreciation but I think it has plenty left to give..

[BigSully1]

Thanks much bjc. MTW has been on my want list, but neglected to watch closely after missing the $44.50 pivot previously. Should be a great buy in right here. Gotta sell something else first though.

Keep up the good work.

[BigSully1]

Bjc, just wondering if you subscribe to IBD. Most of your  picks are on the IBD 100. Funny thing though, MTW has been on the list for quite sometime, but checking today, it has been bumped off for whatever reason. I bought some anyway $46.46.

[bjc]

No, but I'll subscribe at some point.  I definitely agree with their analysis system, I think mine is basically very similar.  I just like stocks that are growing quickly and are still cheap.  EPS growth is very important to me and I know EPS growth is the main thing for IBD. 

[BigSully1]

No, but I'll subscribe at some point.  I definitely agree with their analysis system, I think mine is basically very similar.  I just like stocks that are growing quickly and are still cheap.  EPS growth is very important to me and I know EPS growth is the main thing for IBD. 

Accelerating EPS and rev growth, profit margins, R.O.E., institutional accumulation, technicals, market leader stocks are all things they take into consideration, but not everything on the 100 list is cheap, many can grow very richly valued and some eventually can take a dump. Many can remain on the list for VERY long periods. Some people erroneously  think the IBD 100 list is a buy list. It is not. It is a list of market leading stocks (both fundamentally and technically). They are always stressing to never buy overextended, to use DD and only buy within proper buy points (technical) with confirming volume or positive pullbacks to key points. and then if it doesn't work out, to get out. I believe MTW is within that proper buy range, even though not on the list anymore, I already knew I wanted.

IBD sometimes gets a bad rap, I hear it all the time, because people think just because it's on the list it's an automatic buy, or some  stocks have rallied to above $15 and appeared on the list (they have to be above $15 to appear on the list, thats where IBD considers them to be institutional quality) and then the stock sells off and immediately dissappears from the list because it can't hold $15.. This does happen.

One that made the list Friday was ICOC at #9, the fundamentals were already there, it just needed to get above $15. It now has to stay above $15 to stay on the list. I think it will. Their comment s are that it is "33% past $12.18 buy pt of volatile 9-week cup base."
They are not endorsing a  buy here and won't until it either breaks out of a proper base or pulls back  to certain key points. But they do consider it a "market leader"

Anyway, enough of the IBD sales pitch. Thanks for the MTW tip. I'm also going to look again at SLT #53. Think I'm way too heavy in China and need to diversify some elsewhere. Have you kept up with the political situation between SLT and the government of India? Anything resolved?

[bjc]

I think that situation has been resolved, but I'm not sure. 

SLT is a rocketship, it was up $2+ at one point this morning.  I think mining stocks in general have the ability to appreciate a lot, especially the really cheap ones.  Companies like BHP have PEs expanding to the 18 range, while SLT is still in the single digits and FCX is in low teens.  A lot of room for appreciation if you ask me.

[BigSully1]

I think that situation has been resolved, but I'm not sure. 

SLT is a rocketship, it was up $2+ at one point this morning.  I think mining stocks in general have the ability to appreciate a lot, especially the really cheap ones.  Companies like BHP have PEs expanding to the 18 range, while SLT is still in the single digits and FCX is in low teens.  A lot of room for appreciation if you ask me.

Looks like SLT wants to go all the way down to fill the gap at $20. Theres a thread on SLT with some pretty good info you might want to read. Haven't decided yet to buy or not. I think the issue with the Indian government is still a concern.

[bjc]

Nice buying opportunities today in a lot of stocks IMO.

SLT got crushed.

MTW came back a little bit more.  This stock, MTW, is so cheap it just can't really go down much more.  Unless suddenly they're going to stop selling more cranes than they can make, MTW is worth well over $75 a share. 

I'll look for the information in question on SLT.   I could swear the offering paid for the India government's stake.  I'll check into it.

On a sidenote, IBM down a couple % and INTC up 3% after each reported earnings a short time ago.

[BigSully1]

I'll look for the information in question on SLT.   I could swear the offering paid for the India government's stake.  I'll check into it.

If so, the market is really pricing SLT inefficiently, and I'm going to want a piece of it. Thanks.

[bjc]

MTW came back a little bit more.  This stock, MTW, is so cheap it just can't really go down much more.  Unless suddenly they're going to stop selling more cranes than they can make, MTW is worth well over $75 a share. 

Well, I guess I was wrong.  You could've gotten it for 6 points, or almost 15% less than what I thought if you were quick.  And you'd already be up over 10%.

MTW looks good.  Just broke the short term downtrend, MACD will have a bullish cross with a couple more nice up days. 

When the stock corrected / consolidated 20%, nothing changed at the company.  They're still selling a buttload of cranes in China.  TEX reported overall lackluster #s two nights ago, and MTW kinda got hit yesterday for it but held up well.  But the thing is, the big similarity between TEX and MTW is the cranes business, and TEX's cranes numbers were awesome. 

I look forward to blowout earnigns, increased backlog, etc.  If we get that, it's a nice slow (or fast, I don't care) ride to about 75.  This growth is deserving of a higher multiple than 22.  MTW has gone up a point since I started typing this post I think, up 2.40 now. 

Chart..all indicators ready for a rally, slightly oversold if anything. 


By the way, it's nice to see the market finally respond to what I have thought has been an excellent round of earnings. 

[BigSully1]

bjc, it was a little disappointing to have it drop like that right after purchasing, but I held and should have added. I think CAT's disappointing guidance, maybe even Cummins affected it also, even though it shouldn't have come as any surprise. I watch lots of ER's, and for the most part have been VERY good, of course with the exception of financials.

[BigSully1]

bjc, it was a little disappointing to have it drop like that right after purchasing, but I held and should have added. I think CAT's disappointing guidance, maybe even Cummins affected it also, even though it shouldn't have come as any surprise. I watch lots of ER's, and for the most part have been VERY good, of course with the exception of financials.

Here's a few others that were ugly or disappointing- TRID, KLAC, CRUS, VSEA (Good ER, but very disappointing forward guidance)

[bjc]

Sully-

I don't expect anything but excellent news from MTW.  I think the stock's recent action supports my thinking, but of course we all know anything could happen.   And we're both finally in the green.   

The stock is acting quite strong, only 2 points from 52 week / all time highs.  It is simply really cheap, especially relative to growth.  I plan on making 50%+ in the next 6 months on MTW, if not more sooner. 


TEX is also looking attractive after getting crushed after it's earnings.  It is a similar stock to TEX with less growth trading at a lower multiple.  Value/growth hybrid investors like me will begin to flow in very soon I'd believe.  It's crane #s, the sector it has in common with MTW, were amazing this quarter.  Rest of ER disappointed.  Check it out, I don't know how much longer I'll be able to resist...I think it should get a nice bounce from buyers who want to get in under $70.

[BigSully1]

Hey bjc.

GEHL is another one in the Ag/construction equip. sector (tiny co.) that got crushed more today after ER.

[bjc]

Sully-

Are you concerned about MTW's earnings?  I'm confused..

MTW isn't really in any of the same businesses, just overall sector as these companies you keep providing.  These profiles are from Google Finance.

MTW -

The Manitowoc Company, Inc. is a diversified industrial manufacturer in three principal markets: Cranes and Related Products, Foodservice Equipment and Marine. The Crane business designs, manufactures and markets a line of crawler cranes, mobile telescopic cranes, tower cranes and boom trucks. Foodservice business is a manufacturer of cold side commercial foodservice products. It designs, manufactures and markets product lines of ice making machines, walk-in and reach-in refrigerators and freezers, fountain beverage delivery systems and other foodservice refrigeration products. Marine segment provides new construction, shiprepair and maintenance services for freshwater and saltwater vessels from four shipyards.


GEHL -

Gehl Company (Gehl) designs, manufactures and distributes compact equipment for construction and agriculture applications. Its compact equipment and related attachments are primarily used in a variety of earthmoving and material handling applications. The Company also provides financing for its dealers and their customers. Its compact equipment consists of skid loaders, telescopic handlers, compact excavators, compact track loaders, all-wheel-steer loaders, compact mini-loaders and asphalt pavers. The Company also provides an assortment of related attachments, including pallet forks, augers and backhoes, primarily for skid loaders. The Company operates in two segments, construction equipment and agricultural equipment. Its agricultural implements encompass a range of products, including haymaking, forage harvesting, manure handling and feed making equipment. In March 2006, the Company decided to discontinue the manufacturing and distribution of its agricultural implement products.


I just don't really see them as being all that similar.  MTW isn't going to see any slowdown selling cranes in Asia. 

What is your cost?  Are you going to sell before earnings Wednesday?