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Manitex (MNTX) Up 22% in 3 Months: What’s Driving the Stock?


Shares of Manitex International, Inc. MNTX have been performing well lately. The provider of engineered lifting and loading products has witnessed its shares surge around 22% in the past three months. The company has also outperformed its industry’s gain of 3%.

Investors are optimistic on Manitex’s focus on portfolio optimization program, efforts to cut down debt levels and positive trends in its markets.

Manitex has a market cap of roughly $156 million and average volume of shares traded in the last three months is around 65.07K. The company has an average positive earnings surprise of 202% in the trailing four quarters.

Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock of late.

Driving Factors

In the first quarter of 2017, the company witnessed growth in its served crane markets for the first time in four years. Over the past few years, the company had been affected by the influx of used equipment in the marketplace due to the fall in energy prices. The increased order rate continued in the second quarter and aided the company to deliver improvement in both top and bottom lines. This healthy uptrend in the markets is anticipated to continue in the balance of 2017. Manitex’s portfolio optimization program is substantially complete, and may resort to minor pruning going forward. Its debt level has gone down almost 60% from its peak with further reductions in the pipeline.

The company has already started realizing benefits from the divestiture of smaller and lower margin businesses, which were not crane related, as well as the implementation of cost reduction programs. Gains from these actions as well as improving market will aid third-quarter results. Manitex continues to decrease the operating costs in its international operations, leading to restructuring charges of $0.3 million in the second quarter. These efforts will continue in the third and fourth quarters, and the company is likely to incur approximately $0.4 million additional charges per quarter. Nevertheless, these efforts will translate to higher returns in 2018.

The company is now well poised for growth as a leader in the market for cranes in both stricken knuckle boom forms mounted on a commercial chassis. The knuckle boom products serve a worldwide customer base through the company’s own branches, as well as by high quality dealer network. The company has been focusing on expanding North American market share as evident from the recent addition of new dealers. Further, the company has plans to add to its dealer base. The company will also expand production of knuckle boom cranes in its main production facility in Texas to better serve the North American market out of its lowest cost facility in the United States.

Estimates Moving Up

Positive estimate revisions reflect optimism in the company’s potential as earnings growth is often an indication of robust prospects (and stock price gains) ahead. Estimates for Manitex have moved up in the past 90 days, reflecting analysts’ optimistic outlook.

The Zacks Consensus Estimate for 2017 has moved up 6% and is pegged at 19 cents per share. This reflects an impressive year-over-year growth of 193%. The Zacks Consensus Estimate for 2018 has moved up 8% to 42 cents, reflecting a year-over-year growth of 127%.

Stocks to Consider

Some better-ranked stocks in the same sector include Graham Corporation GHM, Pointer Telocation Ltd. PNTR and Multi-Color Corporation LABL. All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Graham Corporation has an average positive earnings surprise of 93.7% in the trailing four quarters.

Pointer Telocation has an average positive earnings surprise of 59.4% in the trailing four quarters.

Multi-Color Corporation has an average positive earnings surprise of 3.9% in the trailing four quarters.

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