Guru Alan Fournier (Trades, Portfolio) graduated with a degree in mechanical engineering in 1983 from the Wentworth Institute of Technology in Boston. After working several years in the engineering field, Fournier decided to switch career paths. In 1988 Fournier began his investment career at Sanford C. Bernstein. Fournier started to gain momentum and he seized an opportunity to work alongside David Tepper (Trades, Portfolio) at Appaloosa Management. Fournier then went on to found Pennant Capital Management in 2001. The hedge fund currently manages 36 stocks and has a total value of $4.71 billion.
In the first quarter of 2016, Fournier slashed his stake in Manitowoc Co.
Manitowoc is a small shipbuilding and ship-repair company. Manitowoc built ships for the U.S Navy through the two World Wars and they still continue to build ships today. Manitowoc Co Inc is a global leader in cranes and foodservice equipment. The company has over 100 manufacturing, service or distribution services in 20 countries worldwide.
Manitowoc has a market cap of $2.07 billion, a P/E ratio of 39.28, an enterprise value of $3.63 billion, and a dividend yield of 0.52.
Manitowoc has two good signs according to GuruFocus. The dividend yield is close to a three-year high, and the P/B ratio is close to a three-year low.
Manitowoc has a few concerns with their financial statements according to GuruFocus. The company's cash to debt rating of 0.05 versus the industry median of 0.41 ranks them below 93% of the 135 companies in the global farm and construction equipment industry. The company's interest coverage is 1.37, which ranks them lower than 86% of the companies in their industry. Manitowoc also has a mediocre quick ratio of 0.60, meaning that they’re experiencing problems meeting their short term financial obligations.
Below is a Peter Lynch Chart for Manitowoc.
I believe that Fournier made a wise decision to trim his stake in Manitowoc because they do not have great financial strength, and that increases the risk and volatility for long term investors who are seeking value.
Cheers to your investment success.
Disclaimer: Author does not currently own any shares of this stock.
