Paullee
5 years ago
No. 1 Ranked Stock With 106% Growth May Sound Breakout Alarm
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MATTHEW GALGANI08:15 AM ET 12/18/2019
As the top-ranked industry leader in the heavy duty trucks industry, emergency-vehicle maker Spartan Motors (SPAR) is looking to set off the breakout alarms. On Tuesday, it was added to the IBD Breakout Stocks Index.
In addition to posting 106% earnings growth in Q3, analysts expect Spartan Motors to deliver 260% growth in the current quarter. The Michigan-based company has already wheeled in two straight quarters of accelerating EPS gains.
Over the last five quarters, Spartan's revenue gains have been solid and steady, ranging from 20% to 35%.
For the full year, earnings are expected to grow 88%, but then slow to an 11% increase in 2020. Market watchers have recently revised estimates for both years higher.
Which Stocks Are On The IBD Breakout Stocks Index Right Now?
Spartan Motors Revs Up 182% After Long Slide
Spartan Motors makes a range of specialty vehicles, including fire trucks, tankers and RVs. The company also manufactures chassis for shuttle buses and drill rigs.
After reaching a 52-week high in May 2018, the stock stalled out and began a long slide. It saw several weeks of heavy selling in October and November 2018, but then finally found a bottom.
Like first responders coming in to save the day, Spartan Motors then launched a successful rescue mission, lifting the share price 182% from its low on Halloween 2018 to a new high hit a year later.
Spartan Motors is now working on a flat base showing a 19.41 buy point. The stock has been holding above its 10-week moving average, which has been trending higher.
With revenue solid and EPS estimates pointing to continued growth, you may want to add Spartan Motors to your list of stocks to watch.
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Paullee
7 years ago
Core Portfolio Additions
Spartan Motors (NASDAQ:SPAR) - We added an initial 6% position this quarter, which we later increased to 8%, in a fantastic manufacturer of "last mile" delivery vans, emergency vehicles (think firetrucks!) and chassis for large scale Recreational Vehicles (RVs). Spartan, a $300 million market capitalization company with no debt, has a leading position in a duopoly delivery van market, which should continue to grow above historical trends with ecommerce and package delivery set to grow in double digits in the near future.
While the high ROIC van business segment is arguably the jewel of the empire, with expanding 10% EBITDA margins, and at current relative valuation levels accounts for the entire value of the company, we believe the real opportunity lies in the turnaround of bigger emergency vehicles segment by the reputable CEO Daryl Adams. When Adams joined the company two years ago, he found a historically mismanaged and culturally inefficient enterprise. Since then, Adams, who recently bought $3 million worth of SPAR stock on the open market to add to his $2 million holding, has made great strides in improving operations in every segment. In our experience of investing in turnarounds of small industrial manufacturers, we believe the company's problems are easily fixable under Adams' leadership and should drive company-wide EBITDA margins from 4% today to above industry averages of 10% in the next two to three years. Included among some of the easy fixes are consolidating facilities and purchasing departments, investing in hereto non-existent Enterprise Resource Planning software, implementing a culture of lean manufacturing, and compensating the new slate of impressive managers on ROIC enhancing metrics, such as operating income growth and working capital improvements.
We expect SPAR's EBITDA to grow from $30 million in 2016 to over $90 million by 2019 and with low additional capital investment requirements and a substantial portion of those profits to convert to Free Cash Flow. As the company improves its Cash Flow Return on Assets (CFRA) and ROIC from low single digits to potentially 20% or higher, we expect the valuation multiples to expand from 8x to over 10x and for the potential return on this investment to exceed 200% from our initial $8.55 per share purchase levels. In the meantime, the Sum Of The Parts valuation of at least 100% higher than today's stock price and a CEO willing to monetize the company assets for the right price, provide the right margin of safety for this investment.
https://seekingalpha.com/article/4106061-artko-capital-q2-2017-commentary?app=1&auth_param=3ftc:1crfuav:db89d05d04692f5fa10381c92097d8ac
newshkalo
13 years ago
Did you knew for following fraud case, Spartan Motors and its subsidiary, Spartan Chassis, of Charlotte, Mich., recently agreed to pay the United States $6 million in fines and penalties to resolve allegations that it paid kickbacks to an employee of Force Protection to receive a subcontract to make chassis for armored vehicles for the Army, Justice reported.