Q: Not much has been asked about this Co, lately. What do you think of Finning International, being the largest global distributor of Caterpillar products ? There seems to be a tailwind developing with expanding need for heavy equipment/machinery, based on copper/precious metal mining and infrastructure/data centres spending.
Do you like the Co, its growth prospects and valuation ? Any negatives ?
Would you be comfortable buying a full/partial position, before earnings which are due Nov 11 ?
What are the street estimates ?
Thank You
Do you like the Co, its growth prospects and valuation ? Any negatives ?
Would you be comfortable buying a full/partial position, before earnings which are due Nov 11 ?
What are the street estimates ?
Thank You
5i Research Answer:
Estimates for the Q3 are $1.03 EPS and $2.58B revenue. It is a solid company, with a reasonable valuation at 18X earnings and very positive momentum. We agree that the sector outlook is good with various projects and most mining companies flush with cash flow. FTT has beaten estimates in 5 of the past 9 quarters, so not exactly a lay up here. The stock has had some big moves on earnings, with an average (absolute) move of 4%. We do not see any negatives other than the usual economic/cyclical/tariff concerns. Debt is a bit high at more than 2X cash flow. With our typical comments that we do not like buying for one quarterly release, we would be comfortable buying.