GEO Investing

Now that Manitex’s (MNTX) 2014 financial results have been reported, the Street will quickly shift its attention to 2015 and beyond.  We expect MNTX shares to trend higher once the much larger and more diversified company and its future prospects are made clear to the market.  With new analyst 2016 EPS estimates and a GeoPowerRanking (“GPR”) of 8 (estimated earnings per share growth of about 25% to 30% for 8 consecutive quarters), we have renewed conviction that if the market’s initial knee jerk reaction to MNTX’s 2014 financial results drive shares down, we will aggressively add to our position.

Capitalize on Share Price Weakness

Yesterday, we stated that if the market is disappointed with MNTX’s Q4 2014 financial results, we would plan to capitalize on weakness in the share price, (provided there are no surprises) by aggressively adding to our position.  While it is still uncertain how the market will react to its reported Q4 2014 results, with no pre-market mark up or mark down, one would expect that MNTX’s slight beat on EPS and in-line revenues are what the market anticipated.

Manitex International, Inc. (MNTX) reported its financial results on March 5, 2015.

  • Non GAAP Q4 EPS was $0.16 vs $0.22 in the prior year but ahead of analysts Q4 2014 EPS estimates of $0.15.
  • Q4 2014 revenue of $66.9 million vs $65.4 million in the prior year and in-line with analyst Q4 2014 revenue estimates of $66.2 million.
  • The company ended 2014 with a solid $107 million backlog vs $77 million at the end of 2013.

As we mentioned in yesterday’s update, we were concerned that MNTX may have had a challenging quarter due to the company’s history of not always meeting expectations.  Reporting a slight beat and in-line results, coupled with new analyst 2016 EPS estimates of $1.48, adds to our confidence in the story.

The company recently closed two accretive and transformative transactions.  On December 22, 2014, MNTX closed a joint venture with industry leader $TEX to become the operator and 51% owner of ASV, Inc.  ASV’s revenues and adjusted EBITDA for 2014 are estimated at $130 million and $14.9 million, respectively.  MNTX will fully consolidate ASV’s operating results in its financial statements and deduct TEX’s 49% share of net operating income.  The ASV transaction was followed by the acquisition of PM Group, S.p.A. on January 15, 2015.  PM is estimated to have generated around $100 million revenue and $10 million EBITDA in 2014.

The combination of MNTX, ASV and PM create a $500 million revenue run rate business that will compete in a far broader arena of markets both in terms of products offered and global market footprint.  The company will also be much less dependent on any one market sector than in the past leading to more stable and predictable growth.

We do not believe the market has fully factored in the accretive impact of the ASV joint venture and PM acquisition and we are long MNTX.

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