It's cold comfort when one of the nicest things you can say about a
long call is that the company's peers have gotten hammered about the
same in the intervening time. Manitex (NASDAQ:MNTX)
borrowed extensively to fund an M&A program that has taken the
company from around $100 million a year in revenue in 2010 to almost
$100 million a quarter now, but the severe downturn in the energy market
has hammered this company and pushed operating margins back into the
low single digits. Although I think Manitex could still pay its interest
even with a 10% sales decline next year and negative gross margin
leverage, the situation is far from ideal today.
This is not just a Manitex-specific problem. Manitowoc (NYSE:MTW) is down about as much since the last time I wrote about Manitex, and Terex (NYSE:TEX) has done worse. Europe's Manitou (OTC:MAOIF), which is largely screened from the energy-related downturn in the U.S., hasn't done much better either.
At
the risk of not knowing when to quit, I think Manitex still has a
worthwhile future. The company's acquisition of PM Group gives the
company better exposure to what should be an improving European
construction sector in 2016, not to mention exposure to growth in North
America (where PM Group has been historically under-represented). I
think it's early (or at least very aggressive) to expect an energy
recovery, but PM Group and ASV do at least give Manitex more leveraging
to a healthier construction sector in North America.
Read the full article here:
Manitex Struggling As The Boom Cycle Goes Bust
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