MOD - Modine Manufacturing: Great Business Added To My Watch List
2024-05-30 15:40:26 ET
Summary
- Modine Manufacturing stock has risen 270% in the past year, driven by growth in data centers and advanced cooling technologies.
- The company has a huge opportunity in data center cooling and is well-positioned to continue capturing market share.
- The company achieved record revenue in fiscal 2024, with expanding margins and improved efficiency.
- Modine expects continued growth in data center cooling and HVAC/R sales, positioning itself for future success.
- Despite the potential, I consider Modine to be a hold for now.
Investment Thesis
Modine Manufacturing ( MOD ) stock has caught fire, rising roughly 270% over the last twelve months. The company is well-positioned to capitalize on the growth in data centers and the need for advanced cooling technologies driven by accelerated computing demands. The AI market is still in its infancy, and I believe that the data center cooling runway is long for Modine. Strategic acquisitions that have doubled the company's data center cooling capacity and improved its R&D capabilities have me bullish on the business outlook. Modine’s 80/20 strategy, which has the company focused on higher-growth and higher-margin business lines and has improved efficiency and margins in recent years, provides a compelling argument for increased free cash flow margins in the years ahead. With its enhanced operating leverage and high-growth opportunities ahead, Modine’s business looks as solid as ever. However, the stock price may suggest that investors should be hesitant to jump in....
Modine Manufacturing: Great Business Added To My Watch List