NEW YORK (TheStreet) -- Shares of Manitowoc Co. Inc. (MTW) are rising higher by 10.90% to $23.20 in pre-market trading on Monday, after activist investor Carl Icahn reported a 7.77% stake in the company, Reuters reports.
The company operates in two markets, cranes and related products, and foodservice equipment.
Icahn is looking to split the company's crane and foodservice equipment businesses, and said that he would look for board representation if needed, but has yet to have any discussions with the company, Reuters added.
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Icahn is the second shareholder this year to urge the company to split its businesses, Bloomberg reports. Activist shareholder Relational Investors LLC acquired an 8.5% stake in mid-2014 and pushed for a split.
Separately, TheStreet Ratings team rates MANITOWOC CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MANITOWOC CO (MTW) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MANITOWOC CO has improved earnings per share by 38.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MANITOWOC CO increased its bottom line by earning $1.13 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $1.13).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 38.2% when compared to the same quarter one year prior, rising from $52.90 million to $73.10 million.
- MTW, with its decline in revenue, slightly underperformed the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Machinery industry and the overall market on the basis of return on equity, MANITOWOC CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for MANITOWOC CO is currently lower than what is desirable, coming in at 26.67%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.41% trails that of the industry average.
- You can view the full analysis from the report here: MTW Ratings Report