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Opinions Stephen Groff
Finning IntFTT.TOCOMMENTSep 07, 2016
Stephen GroffStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Industrials aren't too topical right now. Stock's been in a range for a couple of years, which is usually a positive sign. He'd be comfortable buying in the range, or if it spent more time above $36. Like tipping a Coke machine, sometimes it needs a couple of heaves to get it up through the price level.
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Premium contentWe reiterate FTT, the world's largest Caterpillar heavy equipment distributor, as a TOP PICK. International infrastructure development is required and the company supplies the big toys to get it done. It trades at 10x earnings, 2.2x book and supports a 22% ROE. We like that cash reserves are growing, while debt is retired and shares bought back. We recommend trailing up the stop (from $29) to $34, looking to achieve $48 -- 25% potential upside. Yield 2.4%
(Analysts’ price target is $48.11)
Premium contentFTT is the world's largest Caterpillar heavy equipment distributor. Recently reported earnings showed new equipment sales were up over 50%, with increases in all global regions. It has a $2.3 billion order backlog, trades at 9x earnings, 2x book and supports a 22% ROE. We like that cash reserves are growing, while debt is retired and shares bought back. We recommend placing a stop-loss at $29, looking to achieve $48 -- 37% potential upside. Yield 2.6%
(Analysts’ price target is $48.56)50% of revenues are in western Canada, plus Chile and the UK. Higher commodity prices offer this some momentum and pushed FTT to new highs this year. But this is a cyclical name, so careful. Yesterday, CAT shares fell on shrinking demand, so that's a canary in the coalmine for FTT. Profits are decent and so is the PE. Take profits,
Still likes it. They executed very well. Still cheap and have pricing power. Trades at 11x vs. Caterpillar's 14%. Problem is growth is limited. Buy around $36.
Greg Newman
Beat last quarter guidance.
Great backlog of projects.
Current share price cheap.
Does not think industrial activity will slow too much.
Great name to get exposure to large section of the economy.
China re-opening a tailwind.
Greg Newman
Jamie Murray Greg NewmanGreg NewmanGreg NewmanGreg NewmanBilly Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Gives good exposure to the industrial sector. The assumption would be based on higher inflation and higher commodity prices driving up the company’s sales. They have also managed past cycles well. Unlock Premium - Try 5i Free
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David Burrows
A very well-run business, and new management has done a very good job of restructuring. The Canadian business has been optimized/right sized, the South American business has been fixed, and they are in the process of fixing the UK business. That is going to take a little time, but he believes the company is well positioned for an ultimate rebound in their end market, which is Cat equipment, tied to things like oil sands, copper ore, etc. They generate a material amount of free cash flow. Expectations off the low are a little different and has been re-rated to a degree, but in tough times are cyclical cash flow benefits. In good times there are nice incremental margins and high operating leverage, that should drive nice earnings growth should things get better. He would be comfortable with this.