In this segment of the Motley Fool Money podcast, host Chris Hill asks Fool analysts Jason Moser, Andy Cross, and Ron Gross to tell us about the companies they have their eyes on this week and why: Titan International (NYSE:TWI), Middleby (NASDAQ:MIDD), and Idexx Laboratories (NASDAQ:IDXX).
A full transcript follows the video.
This video was recorded on May 4, 2018.
Chris Hill: Let's get to the stocks on our radar this week. Our man behind the glass, Steve Broido, is going to hit you with a question. Ron Gross, what are you looking at?
Ron Gross: Steve, do you like wheels?
Steve Broido: Yes, yes I do.
Gross: I've got Titan International for you. Ticker symbol TWI. Small-cap manufacturer of large industrial wheels. I have talked about it quite a bit, as Steve will attest to. They have finally turned the cyclical corner. Sales are up 19% this quarter, fifth consecutive quarterly increase. $14 million profit vs. a $10 million loss, love to see that. EBITDA was up 144%. I mention that because 144 is another word for gross, and it just makes me happy. Shares up 13% this week on the news. Still plenty of room to run. It was even higher earlier in the year, until we started throwing around words like tariffs and trade wars. So, something to keep an eye on there, but I think the stock has some room.
Hill: Steve, question about Titan International?
Steve Broido: I understand they're doing some interesting thing with shapes of wheels, some being oblong, some being --
Andy Cross: Square?
Gross: Did you see on Shark Tank? Shark Tank had a square wheel that they were trying to hock on that thing.
Broido: Can you confirm or deny that they're --
Gross: I deny, wholly and completely!
Hill: Andy Cross, what are you looking at?
Cross: Steve, do you like food? Because Middleby is what I'm looking at. Symbol MIDD. Maker of food service equipment for commercial and home kitchens. TurboChef and Viking are two of their big brands. They just announced an acquisition of JoeTap, the maker of nitro brew dispensers, for those of us who like cold coffee. That's a really fast-growing area. Questions I'm looking for is, the top line growth has really slowed, so, asking Selim Bassoul, who's a very well-respected CEO that we've been invested behind for many, many years, questions about their growth opportunities.
Hill: Steve, question about Middleby?
Broido: For Middleby to grow, do they need to continue to acquire? I know they acquired Viking at some point, five years ago or so. Is that how this company grows?
Cross: They do, Steve, yeah. They have to continue to make those acquisitions. The Viking one has been a struggle for them. There's lots of questions about how they're going to continue to grow, especially in a market that, people aren't going out to restaurants like they used to. So, how is Middleby going to get that growth back?
Jason Moser: Well, Chris, I was thinking yesterday, as our new puppy took another dump on our floor --
Gross: [laughs] Woah!
Moser: -- that's there's just not a whole heck of a lot that he can do to keep me angry with him for very long. It's like, for five seconds, and then I'm like, I can't be angry with him. No matter what he does. Idexx Laboratories reported earnings this week, another great quarter. Ticker is IDXX. This is part of my healthcare and wealthcare basket, for some of you out there who may know. Top line up 16%, almost all organic growth, and 17% growth in recurring revenue with its pet diagnostics business. And that's the really nice part about this business, its razor and blade model. And I'll tell you, the market is paying up for it, paying around 50X full-year estimates now. This is not a cheap stock, it's not one that I would probably go out and buy right now. But I think it's performing well for a reason.
Broido: Are you walking this dog?
Moser: I'm walking the dog all the time. I'll tell you, we have the invisible fence guy coming by next week, and we're going to put one of those little invisible fences on the inside stairs, so he can't get upstairs, at least we'll minimize the damage.
Hill: You got a stock you want to add to your watchlist, Steve?
Broido: I think I may go Middleby.