Why Manitowoc Struggled in 2011
As 2011 comes to a close, it's a great time to look back at what happened to the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.
Today, let's take a look at Manitowoc (NYS: MTW) . With its fingers in both the construction and the food businesses, the Wisconsin company has gotten pulled in different directions by the disparate fortunes of those two industries. But despite rising sales, the company still isn't making a profit, and the shares' performance reflected that fact this year.
Stats on Manitowoc
|Year-to-Date Stock Return||(21%)|
|Market Cap||$1.35 billion|
|Revenue, Trailing 12 Months||$3.45 billion|
|1-Year Revenue Growth||15.5%|
|1-Year Profit Growth||NM (loss of $91.8 million over past 12 months)|
|CAPS Rating (out of 5)||****|
Source: S&P Capital IQ. NM = not meaningful.
What happened to Manitowoc this year?
Manitowoc makes cranes for industrial construction as well as equipment for food service providers. Although construction in the U.S. has been remarkably slow for years, the boom in activity in emerging markets has helped a host of construction-related companies, including Caterpillar (NYS: CAT) and Illinois Tool Works (NYS: ITW) . Meanwhile, results in food services have been reasonably good as well, as that segment produces far greater operating profit margins than the crane division.
One concern is that Manitowoc's debt levels have crept steadily upward in recent years. Now, the company sports a worrisome debt-to-equity ratio of nearly 450%, up from just 17% in 2007.
Manitowoc's recent results, however, have continued to show signs of life. Late last month, the stock rallied after China cut capital reserve requirements on local banks, helping both Manitowoc and peers Terex (NYS: TEX) and Astec Industries (NAS: ASTE) . Manitowoc has doubled its Asian revenue share over the past five years to nearly 10%, so the global economy will remain important to the company's future. Given that the stock's drop from highs during the spring came as fears about a new recession grew, any stability on the economic front should help the company going forward.
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At the time this article was published Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Illinois Tool Works. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.