Finning Int (FTT.TO)

Has gone through a recent change. Feels management is skilled. It has been long known to be a very well run company. Thinks the mining business is going to continue to be challenged for the foreseeable future. Have exposure in Latin America as well. Wouldn’t pursue at these rates. Would prefer owning Caterpillar (CAT-N) because he likes the US$ over the Cdn$.

(Market Call Minute.) Closed at $26.22. His model price is $37.43, a 42% upside. He would love to see it back at $22.57. He would buy it at $28 if it had a positive transit.

(Market Call Minute.) Coming out with some better earnings and there seems to be a bit of light at the end of the tunnel.

(A Top Pick Nov 6/12. Up 10.54%.) Thinks this is a very challenged space right now however, he thinks the market has concluded that they are excellent operators. Had their Q3 yesterday and the market reacted positively. Trimmed his position last winter, when the China story was not playing in a straight line. Doesn’t think it’s your easiest name for making money going forward. Great company.

Under some pressure recently. Anticipated that the revenues will grow in the area of $1 billion in the next 5 years in the service sector of their business with some of it being in the mining area. They are less and less dependent on selling equipment to miners in South America or to the oil sands. Very good value in the low $20 area. 2.73% dividend yield.

Has been cautious on anything related to resources. It is underperforming. Revenue growth is struggling.

Company has announced their Operational Excellence program to improve margins to a targeted 10% level, which may take a couple of years to achieve. Sees good growth in service revenues; a much greater proportion of the total so that it is much less cyclical then selling new Caterpillar (CAT-N) equipment, which has been the bulk of their business. This will give more consistency to earnings as well as better margins. Yield of 2.7% with further dividend increases forecasted over the next 3 years.

Thinks there will be an expansion in margins this year so even if the top line growth may not grow significantly, you should get decent cash flow growth. There could also be a dividend increase.

Not us as cheap as it was a few months ago but still trading below its five-year average. Revenue growth is slowing but will still do about 5% revenue growth in 2013, 7% for 2014. When you combine that with expanding margins for the next 3 years, you get a really big number, a boost in their EPS by about 65%. If you believe in the global growth and China story, it’s a good one to be buying. Buy on a pull back.

(A Top Pick Jan 4/12. Up 14.23%.) Hit his target price so he sold out in April. Stock dropped back and he re-bought in the $22 range. This is a very good stock if you are disciplined as it trades low $20s up to the high $20s and sometimes into the $30’s.

This is a bet on an improving economy even with reduced revenue growth. Still have very strong margins expanding between 9%-10% between now and 2013. Trading at around 6.2X EV to EBITDA compared to their peers at around 8X. This stock has pretty much moved lockstep with copper so if you think China is going to come back a little bit and that US is getting more constructive and that copper is going to do a little bit better, this will probably follow as well.

(A Top Pick Aug 22/11. Up 7.14%.) Holding steady in the low $20’s. So as long as it holds there he would probably continue holding. 2.5% yield.

Good business and all of the markets they operate in are performing well and have growth opportunities. Bug Finning has had a number of challenges and it has nothing to do with CAT equipment, but more to do with their operations. Revenues are growing and backlog is up 6% so it is doing well but investors are focusing on the cost line. If they can get them under control then investors will reward them with north of $30 for the stock price. Prefers to Caterpillar.

(Market Call Minute.) Has been looking at this one. Expect things in the mining industry will be picking up again over the next few years.

Good dividend growth story. One of the largest CAT dealers around the world. Had trouble with inventory management software, but that is moving in the right direction and is now behind them.