Valmont Industries, Inc. (VMI)

5 Star/Small cap/Pays dividend

Not sure about their other products, but I think irrigation products are going to be big for agriculture.

Valmont has a number of things going for it. It has strong international presence, is positioned to take advantage of the stimulus package when roadway work really gets going, and is also well positioned in the energy field with the towers it builds for wind generatiors. Most importantly Valmont has an excellent management team, well versed in international trade, and a strong marketing force. I hold Valmont and it is winner in my portfolio and am a former officer of Valmont so I think I know the inside story of this great company.

Company continues to expand around the world. China's demand should grow fast and this company has 3 modern plants there.

Aquisitions continue to be made and will aid growth and profits in the years to come. Good Management exists both domestically and in their internation division. Expect the trend to go up nicely over 5 year time frame.

Taken a beating as hedgers had to sell to raise cash. But food isn't all that plentiful, and demand won't be dropping anytime soon.

An agriculture based stock is going to do well in the current market. With the rising cost of food and ethanol production, the higher pricing level of these products also represents a higher investment. Irrigation equipment is one way to protect that investment. On the other side of the business is of course the utility tower production which is imperative in the wind generation boom.

Press Release Source: Valmont Industries, Inc.

Valmont Announces First Quarter Results
Wednesday April 16, 5:30 pm ET
Highlights:
- Record first quarter sales, operating income and net earnings.
- First quarter sales increased 24%.
- First quarter operating income rose 51% and was 12% of sales.
- First quarter net earnings increased 59%.
- Global Irrigation Segment sales increased 41% and operating income was 83% higher.
- Engineered Support Structures Segment sales increased 19% and operating income rose 16%.
- Utility Support Structures Segment sales increased 26% and operating income rose 54%.
- Coatings Segment sales rose 4% and operating income increased 26%.

http://biz.yahoo.com/prnews/080416/law075.html?.v=101

Looking good...BUY!

Macro: Some industries will not be replaced by China, VMI's products are infrastructure products, this industry has strong growth potential.

Micro: 5 of last 6 quarters with positive earnings surprises.

Solid company, good management in a secure industry

Infrastructure development.

With $3.20 corn due this year, farmers will be spending money. While I like the ag play, the real story here is the terrible US electric infrastructure. With the advent of wind and other alternative energy sources, the infrastructure will need serious upgrades, and VMI will be there to benefit. Expanding margins show the business has decent internal leverage. They've had quite a run but look decent at 19x forward earnings. Compare to LNN at 25x forward earnings with a less diversified model and the value is clear.

Fortune 40

This is a company that has achieved #1
positions in mechanized irrigation and poles.
It has opened 3 factories in China and has
been profitable in China.The company bene
fits from need for water conservation,
electricity growth and need for more transm
ission structures.Likely will be acquired by a larger company in the future because it is such a great company and because the founder still owns a third of shares and likely won't live forever.

whats not to like...

Irrigation is going to be of a premium this year as farmers try to squeeze every last kernal out of their acreage with record prices looming. These guys are trading at their highs but I don't think it's finished. Good growth and they're established.

Dont fight the trend. The price needs to correct a bit closer to it's next support level at around 72. This will put it's PE at a much more rational number and will help stablize a bottom before moving again to challenge it's highs. stock will underperform for the next several months then tiime to re-evaluate.

Valmont has been one of the economic indicators in Eastern Nebraska for years. In the '80's and '90's, the local television stations would point to Valmont as a sign that the economy wasn't as bad as people made it out to be, and a sign of the recovery.

study project

Utility / Ag play.