Wednesday, July 15, 2015

Seeking Alpha: Middleby Demands A Stiff Price For Growth

Investors will almost always pay up for growth. If you don't understand that, you'll never understand the trading in Middleby (NASDAQ:MIDD) shares, nor large swaths of the market. This doesn't mean that investors are always rational about what they'll pay for growth (if you remember the tech bubble, you know what I mean), and there are plenty of flame-out stories of stocks that carried steep multiples for five or more years, only to double back down to reality. But the bottom line is that growth draws investors like moths to flames.

I still like this company quite a bit, and I believe there are still significant growth/expansion opportunities in commercial foodservice (especially on the cold side), food processing, and residential (on the cold side and outdoor cooking). That said, while I don't think the valuation is crazy and I do think that the company can continue to double the growth of the underlying market, there's just not much breathing room left in the valuation from my perspective.

Follow this link for more:
Middleby Demands A Stiff Price For Growth

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