GEO Investing

If the market is disappointed with Manitex (MNTX) Q4 2014 financial results, we plan to capitalize on weakness in the share price, (provided there are no surprises) by aggressively adding to our position.  2015 prospects lead us to believe that MNTX will experience solid growth.

The GeoTeam published a report, Manitex:  A Solid and Expanding Foundation For Accelerated Growth, on Seeking Alpha on December 30, 2014. MNTX is expected to report financial results for Q4 and for the full year ended December 31, 2014 after the close on March 5, 2015.  The company will host an investors conference call at 4:30 PM EST. Consensus analyst  Q4 2014 estimates are:

  • $0.14 for EPS compared to actual EPS of $0.22 in the prior year.
  • $66.17 million for revenues vs actual revenues of $65.4 million in the prior year.

We do not have a clear feel on whether MNTX will beat these financials estimates, especially considering the company has missed analyst EPS estimates for the last 3 quarters.

Bullish Thesis on MNTX

However, our bullish thesis on the MNTX story is based on the growth prospects of 2015 due to the anticipated positive impact of two material transactions that closed in late December and early January.

On December 22, MNTX announced it closed a joint venture with industry leader Terex (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.

MNTX followed up the ASV transaction with the acquisition of PM Group, S.p.A. on January 15, 2015.  PM is estimated to have generated around $100 million in revenue and $10 million EBITDA in 2014.

Adding ASV and PM to the mix should make MNTX a $500+ million revenue and $50 million EBITDA company in 2015, nearly doubling 2014 operating results.  We do not believe the market has fully factored in the accretive impact of the ASV joint venture and PM acquisition and once the 2014 financial results have been reported, the Street will quickly shift its attention to 2015 and beyond.  When that happens we expect shares of MNTX to trade higher.

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