Seeking Alpha: Miller Industries Making The Most Of An Upturn

Miller Industries (NYSE:MLR) is well off the beaten path. Practically uncovered, this leading manufacturer of tow truck chassis has nevertheless been performing pretty well of late as the company has been leveraging improving domestic demand, a growing foreign operation, and internal cost improvements into a strong run of double-digit operating profit growth.

Now, though, it seems like a fair time to wonder how much upside is left. These shares have risen about 30% since my last article and almost 50% since I wrote on them as a Top Idea in the fall of 2013, and the valuation no longer looks as skewed to "high upside, low downside" as it once was. Although I expect Miller to improve upon its long-term track record of revenue growth and free cash flow generation and I may be underestimating the potential of the company's efforts overseas, it's hard for me to call the shares dramatically undervalued. I still think Miller could generate double-digit annual total returns for its shareholders, but reward and risk look more balanced now unless/until Miller can really outperform on the margins and generate even more cash flow.

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Miller Industries Making The Most Of An Upturn