The Shyft Group: Great Long-Term Upside Potential, But Short-Term Risks Remain

Summary

• Revenues have declined significantly for three consecutive quarters as demand is stabilizing after a strong 2021 and 2022.
• Profit margins are suffering due to weaker volumes and inflationary pressures.
• The balance sheet is very strong thanks to very high inventories and receivables.
• The company doubled the dividend payout in 2022 and it remains safe despite current headwinds.
• This represents a good opportunity for long-term dividend investors, as well as for those investors interested in obtaining significant capital gains once prospects improve again.

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Investment thesis

After an impressive 2021 and 2022 due to high consumer demand in the e-commerce space as a result of self-imposed restrictions to stop the spread of the coronavirus, which pushed delivery companies to increase their fleet of vehicles, The Shyft

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.