Shares of commercial foodservice equipment manufacturer Manitowoc Company, Inc. (MTW) reached a new 52-week high of $30.70 on Feb 20, ahead of its previous high of $29.29 on Jan 31. Average volume of shares traded over the last three months stood at approximately 2902K.
Over the past 52 weeks, Manitowoc’s shares have ranged between a 52-week low of $16.18 on Jun 24, 2013 to the new 52-week high. The company has delivered a robust one-year return of about 55.10%, outperforming the S&P 500. Manitowoc has a market cap of $4.1 billion. Manitowoc has long-term estimated earnings per share growth rate of 15%.
What’s Driving Manitowoc Upward?
Shares of Manitowoc started escalating following its strong fourth quarter results on Jan 30. Adjusted earnings per share were 47 cents, a 74% year-over-year increase, helped by sound performance of the Foodservice segment, successful introduction of new products as well as the company’s cost control initiatives. The bottom line beat the Zacks Consensus Estimate of 33 cents.
Furthermore, shares have also found support in China's January trade data, which showed acceleration contrary to expectations. This has eased fears of a slowdown in the world's second-largest economy. In January, imports to the country rose 10% year over year and exports rose 10.6%. Manitowoc and other machinery-construction and mining stocks including Caterpillar Inc. (CAT), which had otherwise been affected by the low demand in construction and mining, particularly in China benefitted from the news.
For 2014, Manitowoc expects modest top-line growth in the Crane segment. The company forecasts high single-digit improvement in operating margins of the Crane segment.
Crane utilization and rental rates continue to improve with demand. Going forward, demand from the wind sector as well as from oil and gas markets is expected to grow. Manitowoc remains optimistic regarding its new products, which include an array of technologically advanced products that will be launched at ConExpo, the premier construction-equipment trade show that is slated to be held in Mar 2014. This could be a catalyst for the Crane segment. A turnaround in the construction sector will also boost Crane sales.
Foodservice Equipment revenues are expected to rise in mid-single digits and the company expects a high-teens gain in segment margins. The segment will benefit from new manufacturing facilities, restructuring initiatives and new products.
In Jan, 2014, Manitowoc announced that it has refinanced some of its debt, which is expected to save approximately $20 million of interest expense in 2014.
Other Stocks to Consider
Currently, Manitowoc carries a Zacks Rank #1 (Strong Buy). Some other stocks worth considering in the sector include Joy Global, Inc. (JOY), and Zebra Technologies Corp. (ZBRA). While Zebra Technologies carries a Zacks Rank #1, Joy Global holds a Zacks Rank #2 (Buy).