June 24, 2012 in Business

Motley Fool: Crane maker’s stock appears ready for surge

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A Manitowoc crane erects steel beams inside Boston’s Fenway Park.
(Full-size photo)

Crane maker Manitowoc (NYSE: MTW) has been performing pretty well, but its shares have taken a beating. That presents an opportunity for long-term investors.

The crane business has bounced back strongly after the financial crisis. In Manitowoc’s fourth quarter, sales growth hit the highest year-over-year rate since 2007, and new orders climbed to levels last seen in 2008.

The company kicked off 2012 on a solid note, too, with the division’s first-quarter backlog value reaching its highest level since the recession. A recovery seems to be under way, with data from the U.S. Census Bureau finding the dollar value of total “construction put in place” in March and February 6 percent and 5.8 percent higher, respectively, than last year.

Manitowoc’s other business, food-service equipment, seems poised for a good year, too, thanks in part to new products.

The company does carry a lot of debt, but it has initiatives in place to reduce that. Its growth plans are robust as it expands in emerging markets; the proportion of revenue Manitowoc is generating from Asian markets has doubled over the last five years. It recently became the first company to make rough-terrain cranes in Brazil. The time is ripe, as the nation gears up for the 2014 World Cup and 2016 Summer Olympics. Give this stock some consideration.

Ask the Fool

Q: I want to buy my first home in a few years. How should I invest the money I’ve saved for that? – T.J., Jacksonville, Ill.

A: Unfortunately, you should consider the place that’s usually best for long-term appreciation, the stock market, to be off-limits. In the short run, the market can go up – or down – sharply. In the long run, it has averaged roughly 10 percent per year, but even that is an average, not a guarantee.

Don’t risk money you’ll need within three years (or even five or more years, to be more conservative). Keep short-term moolah in a safer place, such as CDs or money market funds, to protect your principal.

Learn more about short-term savings at fool.com/savings and bankrate.com.

My dumbest investment

I have so many dumb investments to choose from! I owned 5,000 shares of IMAX and sold all but 500 at $5 per share. They traded above $20 recently. I owned so much that I got scared out of the position. My lesson there was to know what you own and why you own it, so you can hang tough when the market tests you. I also sold Ford stock around $2 per share when I saw General Motors and Chrysler slump, locking in a loss from my purchase price at $20. Panicking is bad – so aim to know what you own, so when the idiots say sell, you hang on. – J.S., online

The Fool responds: That’s a good lesson. The more you understand your holdings, the better you’ll be able to distinguish between temporary challenges and long-term problems. If you’re rather confident that a company will be worth much more in the future, hang on. Ford has recently been trading around $10 per share.


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