Mike the PhD

Arctic Cat: Mauling The Competition

Arctic Cat (NASDAQ:ACAT) is a maker of snowmobiles and all terrain vehicles (ATVs) through a network of independent dealers in the US and around the world. The company also makes garments and accessories that complement its products. The small ~$600 million dollar market cap firm looks undervalued compared with its closest competitor Polaris (NYSE:PII) especially considering the growth the firm is seeing. This undervaluation is probably due to market inattention given the small size of Arctic Cat and, as I will explain throughout this article, the company represents a good opportunity for investors looking for undervalued growth plays.

Both Arctic Cat and Polaris are nicely positioned to expand earnings over the next few years as the...

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