WNC - Alamo Group: A Downgrade On Falling Backlog

2024-06-28 15:19:06 ET

Summary

• Alamo Group is a $2.11 billion enterprise producing vegetation and infrastructure maintenance equipment.
• Shares don't look bad, but they aren't exactly the cheapest either.
• The company saw revenue and profit growth, but backlog declined and pricing compared to similar companies justifies a downgrade from 'buy' to 'hold'.

Unlike most investors, I find companies that focus on more traditional products and services to be the most interesting. The more ‘boring’ a company is from an operational perspective, the more I find it fascinating. Very little is as traditionally ‘boring’, I would argue, as businesses that produce and service machinery/equipment. One of the companies that I looked at last year that I became bullish about that is in this space is Alamo Group ( ALG ). For those not familiar with the firm, it is a $2.11 billion enterprise that produces and sells not only vegetation management equipment, but also infrastructure maintenance equipment. Examples include tractor mounted and self-propelled mowers, tree and branch clippers, vacuum trucks, snow removal equipment, and more....

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