Ravi Ramenani
Long only, value, utilities, deep value

Douglas Dynamics: Plow Your Way Into The Profits

Great businesses are everywhere; sometimes they are right in front of us making screeching noises early in the morning. I am talking about the snow plowing equipment business. I have recently gone through the annual filings of Douglas Dynamics (NYSE:PLOW), leading company in the snow plowing industry, and learned the salient features of the industry. Before jumping into the company metrics I would like to go over some of the virtues of "Snow plowing equipment" industry.

  1. Low reinvestment rate: Every dollar invested in CapEx generates ~$75 in revenue. When was the last time you came across a company with such a multiplier effect?
  2. Replacement Cycle: Equipment needs to be replaced every 7-8 years, which gives a stable revenue
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