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Contrarian, event-driven, special situations

Supreme Industries: Margin Expansion Story And Cyclical Tailwinds Enhance Earnings Power


Supreme Industries (NYSEMKT:STS) still has supreme earnings potential. STS is a tiny company with a market cap of just $92m. I believe the stock is mispriced based on the following factors:

  1. Operational refresh has increased margin profile substantially.
  2. Post-earnings sell-off largely unwarranted.
  3. Attractive takeout candidate with double-digit buyout potential in next 12-24 months

Shares currently sell for ~$6.00 but were priced as high as $7.00 prior to 3Q earnings. I believe that based on the upcoming quarter's expectations, the stock will trade up significantly to over $8.00 representing over 30% upside from today's valuation. As I will demonstrate, the steps I've taken to derive my short-term valuation estimate are fairly simple and do not require a whole...

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