I liked it.
Both top-line and bottom-line growth surprised me (and the few people who follow Gehl on 'the street') on the upside. Balance sheet looks strong as ever, expenses remain tight, margins continue good, inventories & receivables are under control.
I'm pretty sure earnings won't continue at 60›/quarter, but the next few Q's should come in above last year's. The expected PE would be a little high for the end of a cycle, though. If expansion continues, Gehl's worth more, but I prefer to be conservative.
Gehl seems to be establishing a nice niche in construction (that accounted for most of last quarter's jump in sales). The more of a franchise they can establish there, the more they earn their PE. Agriculture sales are up slightly; given how poorly that has been in the last five years, it's reassuring, but not exciting.
Even after the runup to 18+, I'm holding the stock. I'd rather own Gehl than Deere or Case; I think the upside is similar, but the downside is mitigated by Gehl's still acceptable (if rather fuller than, say, last fall) valuation. |
