This infrastructure company has agreed to sell its Australian mining consumables business, Donhad Pty. Ltd., (acquired in 2010) to Moly-Cop. The transaction is scheduled to close prior to the end of the year, and the selling price has not been made public. Valmont reported a 9% increase in profits last quarter, beating estimates by a nickel.
Valmont Industries (VMI)
From Positive Patterns
Valmont Industries (VMI) is a quality cyclical company that is an infrastructure play and, in my opinion, is still a good buy. The www.zacks.com consensus is $7.11 this year and $8.01 in 2018, and I think we see a turnaround in 2018 that beats the $8.01 consensus.
VMI has a good balance sheet, strong free cash flow and tremendous upside earnings leverage.
I would buy this up to $165 but would not wait. At $150 or below, it’s a bargain that will not last long. But just know this: VMI is a cyclical trade for 3-5 years—not a buy/hold stock.
I do think there is exciting upside in the upcoming cycle, so this one could be a fun trade. The shares are best for an IRA/tax free account, etc.
Bob Howard, Positive Patterns, P.O. Box 310, Turners, MO 65765, 417-887-4486, August 14, 2017