As Top Ideas go, Miller Industries (NYSE:MLR) hasn't really worked out so far. Up about 13% since my original late September piece, the shares have done alright compared to Spartan Motors (NASDAQ:SPAR) and Oshkosh (NYSE:OSK), but they've lagged the S&P 500 and Supreme Industries (NYSEMKT:STS).
While none of these are particularly good comps (Supreme is more
focused on truck bodies, Spartan on emergency response and delivery
vehicles, Oshkosh on aerial work platforms, defense, and
fire/rescue/refuse), I think the problem is that access to capital for
small businesses (and most towing companies are smaller businesses) is
still limited and Miller is an illiquid stock with no sell-side support.
I
still believe this is a stock that can generate market-beating returns
over the long term. Double-digit revenue growth is not the "new normal",
but catch-up/replacement spending should generate above-market growth
for a few years and the company's offshore growth efforts offer
meaningful upside. I'm not looking for particularly ambitious margin
improvements, but I think the shares are about 20% undervalued today.
Continue here:
Miller Still Underfollowed And Undervalued
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