MTSC
MTS Systems Corporation
Industrial/Transportation
03/24/2014
Presented
| Date | 03/21/2014 |
| Price | $69.38 |
| Market Cap | $1.06B |
| Ent Value | $1.04B |
| P/E Ratio | 23.39x |
| Book Value | $16.90 |
| Div Yield | 1.7% |
| Shares O/S | 15.28M |
| Ave Daily Vol | 70,000 |
| Short Int | 6.46% |
Current
| Price | $58.49 |
| Market Cap | $1.13B |
| MTS Systems Corporation supplies test systems and position sensors in the Americas, Europe, and Asia. The company’s Test segment provides testing solutions, including road simulators for durability simulation; tire performance and rolling resistance measurement systems; moving road-plane systems and balances for aerodynamics measurements in wind tunnels; systems for the physical characterization of materials, such as ceramics, composites, and steel; and systems to test durability and performance of implants, prostheses, and other medical and dental materials and devices. This segment also offers products, systems, and software to perform static and fatigue testing of aircraft and space vehicles; systems for structural engineering, including high force static and dynamic testing; and seismic simulation tables to test the designs of structures and set building codes. In addition, it provides installation, calibration, maintenance, training, and consulting services, as well as various accessories and spare parts. This segment serves automobile, truck, motorcycle, motorsports vehicle, construction equipment, agricultural equipment, rail, and off-road vehicle manufacturers and their suppliers, as well as power generation, aerospace, bio-medical, wind energy, structural engineering, oil and gas, and other industries. The company’s Sensors segment manufactures products utilizing magnetostriction technology for manufacturers of plastic injection molding machines, steel mills, fluid power, oil and gas, medical, wood product processing equipment, mobile equipment, and energy industries. It also offers products to measure fluid displacement for customers in the process industries. The company sells its products through direct sales organization, and independent representatives and distributors, as well as through catalogs. MTS Systems Corporation was founded in 1966 and is headquartered in Eden Prairie, Minnesota. |
Highlights
The presenter is short shares of testing equipment manufacturer MTS Systems (MTSC), and explained his observation that there is less global capex devoted to innovation at this time. In addition, MTSC is exposed to emerging markets, which look shaky at present. He has followed global product testing and testing equipment companies for some time, and while he acknowledged that MTSC runs a decent business, he thinks revenues are likely to be flat-to-down this year. The main reason he is short is the deterioration he sees in the company’s balance sheet. In particular, their cash conversion metrics are flashing warning signals that business is slowing materially, and he sees potential to miss Street EPS estimates for 2014 by a wide margin.
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