Opinions Nick Majendie
Finning IntFTT.TOTOP PICKJul 10, 2013
Nick MajendieStock price when the opinion was issued
As of Jun 04, 2026. Market Open.
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The market cycle model is essentially the business cycle with its 5 different phases. Phases 4 and 5 are the contraction phases, when you typically see the stock market coming under pressure. Phases 1, 2, and 3 are the expansion phases and they typically last a year.
His team believes that last year was phase 1, so now we're in phase 2. This matters because industrials typically do well in phase 2. They're bullish on industrials generally.
Q3 miss due to softness in Western Canada. Capital discipline. Copper activity has been pretty solid, but Trump means there's not going to be as much thirst to go green. Pricing power, but that's over for now. Doesn't see a lot of growth over next couple of years.
Good over the long term. If it's in your non-registered account, don't sell. Easier ways to make $$ over the next 12 months.
Greg Newman
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Premium content
Premium contentPremium contentWe reiterate FTT as a TOP PICK following recently reported record high free quarterly cash flow of $330 million. Management commented that order backlogs are growing, while velocity of deliveries is growing. It trades at 11x earnings, 2.1x book and supports a ROE of 20%. We like that cash reserves are growing while debt is retired and shares bought back. We continue to recommend a stop at $34, looking to achieve $49 -- upside potential of 19%. Yield 2.6%
(Analysts’ price target is $49.33)Premium contentWe reiterate FTT, the largest dealer of Caterpillar heavy equipment in the world, as a TOP PICK. They announced $700 million of new orders in April, with orders from Chile, Canada, the UK and Ireland. It trades at 12x earnings, under 2.5x book and supports a 20% ROE. We like that cash reserves are growing, while debt is retired and shares bought back. The dividend is backed by a payout ratio under 30% of cash flow. We continue to recommend a stop at $34, looking to achieve $48 -- upside potential of 20%. Yield 2.4%
(Analysts’ price target is $48.38)Phase three of market cycle is good for this business. Staple of economy. Expecting more lift in the stock, but trend remains up and to the right. Will continue to own.
Javed Mirza
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.