The Catalyst Tree
Long only, mid-cap, small-cap

Uncovered: Toromont - A Boring CAT Dealer Generating Good Returns For Shareholders

In June 2011, Toromont (OTCPK:TMTNF) completed the spin-off of gas compression equipment manufacturer Enerflex. The announcement was a bit curious since Toromont had just completed the takeover of Enerflex less than a year and a half earlier. After integrating the newly acquired business with its legacy energy systems assets, Toromont saw the opportunity to create value for shareholders.

Since the spin-off, a re-focused Toromont has seen shares nearly double. The dividend has continued to increase and earnings are up nearly 40% - even though commodity prices have collapsed along with the fortunes of many existing and potential customers. The business is nearly debt free and continues to earn an attractive return on invested capital.

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Yet,

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