There is no reason for this stock to jump like that on today’s earnings report. YES – margins and sales were up – BUT THIS IS ENTIRELY DUE TO THE FICKLE (*ONE TIME*) INFRASTRUCTURE BUSINESS IRRIGATION – THE BREAD AND BUTTER - WAS WEAK SALES GREW ONLY 4% COMPARED TO VALMONT UP 16% - LNN LOSING SHARE, ESPECIALLY INTERNATIONALY.
YES they were better than expected, but q4 is always the most up and down.
The infrastructure biz has one of these big quarters every year and gooses the bottom line but usually the business is just a lame duck. 06 07 08 all the same. Its got great margins but that’s if they can sell ‘em.
Well ... that's what she said as the stock got an 8 point pop off the last annual earnings report to ~$58. Then the stock (BIRD that was cooked) went to a $79 handle over the next 8 months. VMI may be a larger cap more diverse compny but then it is then a comparison of apples to pears as irrigation is just a small piece of the VAlmont business. LNN clearly a buy below a $53 handle in this range bound market and stock.
You're exactly right, good post. International irrigation sales sucked. It seems there could be a bigger problem there than what management glossed over.
Anyway the stock enjoyed great momo on it, and made me very happy, kept a 4% trailing stop on it all day, but never pulled back much. Got out EOD. Thinking about adding VMI at some point. It looks like the better deal now.