Topic: How To Invest

The Successful Investor Hotline – Friday, June 18, 2021

Article Excerpt

FINNING INTERNATIONAL INC., $31.51, Toronto symbol FTT, remains a buy. The company sells and services Caterpillar-brand heavy equipment in Western Canada, South America and the U.K. The re-opening of economies is spurring demand for used and new equipment. Under its long-term growth plan, Finning also aims to increase its revenue from product support services, such as maintenance and repairs. Between 2010 and 2020, product support revenue grew at an average annual rate of 5%. Thanks to stable oil drilling and mining activity as commodity prices rebound, Finning now expects support revenue will rise between 5% and 9% annually to 2023. New government spending on infrastructure, and the resulting upswing in construction activity, will also contribute to those gains. Due to COVID-19, Finning cut 9% of its workforce and reduced other costs. Those moves cut its annual expenses by $100 million. The company now aims to cut a further $50 million from its annual costs, mainly by shrinking its back-office operations and automating its procurement and payment…

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