TTC (THE TORO COMPANY)
- P/E: 31.6
- GAAP DILUTED YEAR-OVER-YEAR EPS GROWTH LAST QUARTER: $.06
- SECTOR: PRODUCER MANUFACTURING
- ASSETS-LIABILITIES: 2.8
- DIVIDEND: 1.05%
TTC is the symbol for Toro,
a manufacturer of lawnmowers, irrigation and lighting systems, and
other tools for residential and professional landscaping. They
utilize high-quality products and deliver them in a reliable package
to their customers. Toro reports 5/25/17, and will attempt to
demonstrate business growth in line with expectations.
In the most recent quarter,
Toro reported a 6% boost in revenue and an increase in operating
costs by just under 6%. The company utilized some of its 35%
increase in cash to repurchase stock. Inventories and receivables
were cut on a year-over-year basis, signifying that the company is
fulfilling orders more rapidly. Professional services make up the
bulk of the company's revenue at approximately 80%. While
residential revenue decreased on a year-over-year basis, the
professional services increased.
Richard Olson is Toro's
CEO, newly appointed 11/1/16. He has been with the company since
1986 as an engineer. He has a BS and an MBA. On 11/3/16, Toro
acquired a German irrigation products brand based to
expand international exposure. I know from my experience in
landscaping that Toro makes reliable equipment utilizing high-quality
Briggs and Stratton motors. The company has a good reputation in the
industry, and if Richard Olson can keep up quality while expanding
the business, consensus expectations will rise. Analysts have a
median PT of $61.5, while the share price has risen nearly 20% since
the beginning of 2017, and 50% since 5/2016.
Toro has a P/E of
approximately 32, higher than its chief competitor John Deere at 27.
While Deere has reported shrinking revenues in recent years, Toro's
revenue is growing. Should its growth rate remain constant over
2017, it will be trading at around 30 p/e. Given that the company is
growing, share price has risen with the expectation of continued
growth, and if its competitor trades at 27 with its decline in
revenue, then expectations may continue to drive Toro higher. When
the company reports 5/25/17, it will attempt to confirm the thesis
that the company is increasing its revenue through virtue of its
reliable, and high-performing products.
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