The last couple of years have added some operational complexity to Douglas Dynamics' (PLOW)
business, as lower snowfalls and economic issues led to lower demand
for the company's market-leading snowplows and lower orders from dealers
looking to better manage their inventory. This winter has seen
something of a perfect storm for the company, as higher than average
snowfalls compared with low dealer inventories have led to higher
shipments, orders, and management expectations for 2014 performance.
Douglas
Dynamics enjoys very solid market share and should see relatively
consistent replacement demand. The company also has the opportunity to
pursue deals like its TrynEx acquisition to leverage its dealer network
and generate operating synergies from similar businesses. All of that
said, it seems a bit of stretch to call the stock significantly
undervalued at today's levels.
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Douglas Dynamics Looks For Cold Weather To Spur A Hot Streak
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