Thursday, December 31, 2015

Seeking Alpha: Manitex Struggling As The Boom Cycle Goes Bust

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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