Josh Arnold
Long/short equity

Modine Manufacturing: Unreasonable Expectations And Poor Fundamentals

Overview

Modine Manufacturing (NYSE:MOD) develops, manufactures and markets various heat exchangers and systems for on and off-road vehicles as well as various industrial and refrigeration applications. With 90% of its revenue coming from various types of vehicles, MOD finds its shares heavily levered to automobile sales in the US and Europe. Last quarter's earnings sent the stock flying and shares have doubled over the past year. With a forward multiple of 17 and a huge rally behind it, investors may be ready to take profits in the name. I'll argue here that ludicrous growth targets and an automobile market that may be near topping out will derail the rally in MOD shares and send the stock lower. I'll...

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