Cost cutting sets these two up for gains

Article Excerpt

WAJAX CORP. $25.29 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding: 20.0 million; Market cap: $506.5 million; Dividend yield: 4.0%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts and systems such as ball bearings, hoses, diesel engines and transmissions. Wajax’s customers are spread across the resources, construction, manufacturing and transportation industries. In the three months ended June 30, 2018, the company’s revenue jumped 17.4%, to $382.7 million from $325.9 million a year earlier. Wajax made $12.1 million, or $0.62 a share, in the latest quarter. That’s up 56.9% from $7.7 million, or $0.40. In addition to the higher revenue, the company’s ongoing restructuring efforts contributed to the profit jump. As part of that plan, Wajax cut its workforce by 10%. Savings from the restructuring should also lift 2019 earnings to $2.44 a share. The stock trades at just 10.4 times that forecast. The company’s balance sheet is sound: long-term debt of $168.8 million is a reasonable 33% of…

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