A Second Quarter Shortfall And Weakening Markets Aren't What Manitex Shares Needed

I was reluctant to give Manitex (NASDAQ:MNTX) full credit for its performance in the first quarter, and key end-markets have apparently slowed further. That, in turn, has led to a disappointing second quarter and a weak share price as the outlook for the second half is quite a bit cloudier now. Although Manitex does have credible attractive opportunities like its growing knuckle-boom crane business, I don't see the construction end-markets getting stronger from here, and I think margin leverage is going to be harder to achieve.

Compared to markets like Class 8 heavy trucks, I don't think Manitex is likely looking at an impending sharp cyclical correction, but I also don't think the company's end-markets are getting stronger. That sets up a difficult valuation/stock call, as the long-term discounted free cash flow opportunity still looks relatively attractive, but the Street tends to value machinery companies like Manitex, Manitowoc (MTW), and Terex (TEX) more on the basis of near-term margin and revenue expectations, and those don't work as much in the company's favor now.

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A Second Quarter Shortfall And Weakening Markets Aren't What Manitex Shares Needed