Manitowoc Company (NYSE:MTW) is a manufacturer of commercial foodservice equipment and industrial cranes. As a global company, Manitowoc derived 56% of its total revenue from overseas sales. Europe is Manitowoc's largest overseas market with Europe accounting for about 22% of Manitowoc's total sales.
Manitowoc's crane division accounts for about 62% of total sales. Products manufactured in the crane division are boom trucks, tower cranes, mobile telescopic cranes, and a broad line of lattice-boom crawler cranes with capacities up to 2,500 U.S. tons. Other sources of revenue for the crane division are crane maintenance services, crane repair services, and the sale of repair parts for cranes.
The foodservice division accounts for about 38% of Manitowoc's total revenues. This division sells essentially every type of equipment needed to equip a commercial kitchen. These products include stoves/ovens, food warmers, commercial ice makers, commercial freezers/coolers, commercial dishwashers, beverage dispensers, food serving/storage equipment, and a broad array of food preparation equipment. Manitowoc markets these products to supermarkets, convenience stores, restaurants, hotels, and healthcare facilities.
We believe that Manitowoc will grow revenues about 10% in 2013 with the bulk of the increase coming from increased sales from its crane division. Also, we believe that Manitowoc will earn $1.40 in 2013 and $1.78 in 2014 compared to 2012 earnings of $0.77. In our opinion, Manitowoc is a good value at today's price and we are considering adding Manitowoc to our portfolio.
We believe that Manitowoc is a good value at $17.60/share for the following reasons:
- Manitowoc has a forward earnings multiple of just 12.6 times 2013 earnings.
- Manitowoc has low valuation ratios with a PEG ratio of 0.99, price to sales ratio of 0.59, and an Enterprise Value/Revenue ratio of 1.07.
- Analysts' opinions have improved over the last few months with 7 out of 13 analysts giving the stock a Buy/Strong Buy rating.
- S&P has a Strong Buy rating on the stock (5 out of 5 Stars) and a 12 month price target of $28.00 which is 59% above today's price.
Disclaimer: Ulfberht Capital is not an investment advisor. This article is not a recommendation to buy or sell securities. Always consult your investment advisor before making any investment decision.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MTW over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.