Finning: A cyclical on the rise

Article Excerpt

Stocks in the Resources & Commodities and Manufacturing & Industry sectors expose you to above-average volatility, while Finance and Utilities companies are less volatile than average. Consumer stocks fall in the middle. Finning sells equipment to customers in both the Resources and Manufacturing sectors, which adds to its risk. However, the company has special advantages that set it apart. For example, it is the market leader in Western Canada, an area with strong growth potential in resource development. It is also offering additional services, which are more profitable than equipment sales. As well, the stock trades at an attractive multiple in relation to its rising earnings. FINNING INTERNATIONAL INC. $31 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.1 million; Market cap: $5.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.finning.com) is the world’s largest dealer of tractors, bulldozers and trucks made by Caterpillar Inc. (New York symbol CAT). It also sells…