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With half of 2012 in the record books, it's important to take a look at whether the stocks that interest you can live up to their full potential. By making sure you know about a company's future plans and possible challenges, you can make a better decision about whether it's a smart investment for your portfolio.
Today, let's take a look at Manitowoc (NYSE: MTW ) . As we saw in our look at Manitowoc last month, the crane builder and food-service equipment provider has seen plenty of ups and downs so far this year. But as it faces new challenges from slowing economic growth around the world, can it find a way to go higher and stay higher? Let's take a quick look at Manitowoc's prospects for the rest of the year and beyond.
Stats on Manitowoc
|Average Stock Price Target||$16.35|
|2012 EPS Estimate||$0.79|
|2013 EPS Estimate||$1.45|
|2012 Sales Growth Estimate||11.1%|
|2013 Sales Growth Estimate||12%|
|CAPS Rating (out of 5)||****|
Source: Yahoo! Finance.
What will the rest of 2012 bring for Manitowoc?
The construction industry has been hot, and so you'd think that Manitowoc would have benefited greatly from surging global construction activity in recent years. But unlike Caterpillar (NYSE: CAT ) and Joy Global (NYSE: JOY ) , which have made the most of opportunities in China and other emerging markets, Manitowoc still gets the lion's share of its sales from older, slower-growth economies in North America and Europe.
As a result, how Manitowoc does for the rest of the year depends largely on what happens to European economies. With some calls for a recession there, Manitowoc may not see a rebound for some time.
But the company isn't standing still. Manitowoc is joining Caterpillar and Terex (NYSE: TEX ) in expanding in Brazil, which is going through a big construction boom in connection with its hosting both the Olympics and the World Cup within the next four years. Moreover, as the company starts to aim at reducing debt, it will be better able to jump on new opportunities for growth.
One concern, though, is valuation. Recent weakness in net income has the company trading at more than 35 times trailing earnings. Although its forward P/E is more in line with its peers, it nevertheless puts pressure on Manitowoc to deliver better results quickly.
Manitowoc has some upside potential, but if it's riskier than you have the stomach for, there are some other ideas you might like better. Let me invite you to learn about three smart long-term stock plays in the Fool's latest special report. It's yours for the taking and is absolutely free, but don't miss out -- click here and read it today.
Click here to add Manitowoc to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.