Manitowoc (MTW-N)

MTW's small size adds risks, and it has a huge amount of debt, at $430M (net) vs only $17M in cash flow in the past 12 months. The stock is reflecting the risks, down 25% this year, but it is priced well at 10X earnings. Control is in the market, and a takeover would make sense. But we do not like investing on that possibility alone. It is profitable, but growth has slowed, and as a cyclical company the balance sheet risk is too much for us to endorse this. 
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(A Top Pick Jan 24/14. Down 16.41%.) One of his worst picks in 2014. Sold a little when it got to around $33, but still owns some in his dividend funds. They manufacture items that going into restaurants. There is the food service component and then there are cranes. A part of the crane business is sensitive to European GDP as well as being sensitive to the energy sector. What happened in 2014 has really had an impact on the company and on their guidance. At some point it would make sense to split the 2 divisions up. This is a cyclical stock. There is a fair amount of debt on the balance sheet, so in a low interest rate environment, if they ever do make money, they can pay that down, recapitalize. If you own, be careful because it is going to be very, very economically sensitive. Still likes it.

Diversified manufacturer of cranes and food-service equipment. Food-service division accounts for about 60% of operating profits. Crane division accounts for about 40% and is largely leveraged to non-residential commercial spending, which hasn’t really improved during the last 3-5 years. Pre-recession earnings peak for this company would suggest that as the economy continues to improve and you see a pickup in non-residential commercial spending, earnings growth could approach $3.50 on a normalized basis. Great buying opportunity. Dividend yield of 0.34%.