MaxiTRANS is an Australian manufacturer and supplier of trailing transport equipment and solutions

MaxiTRANS is an Australian manufacturer and supplier of trailing transport equipment and solutions. They are the largest supplier of road transport equipment in Australia, accounting for about 30% of the market. The recent share price drop can be largely attributable to guidance for FY14 reported NPAT of $16.5 - $17.5m, which represents a downgrade of about 20% guidance provided in February 2014. MaxiTRANS is beholden to the economic cycle, and the downgrade reflects softer market conditions as well as some 'one-off' items. The 'one-off' items (outlined above) account for about 50% of the total downgrade. We anticipate that earnings will rise again in 2015 given the one-off nature of much of the recent downgrade. We forecast a 10x P/E multiple for FY14, versus the market P/E of 15x. This discount (and associated high yield) looks like value, notwithstanding soft market conditions. Our monthly newsletter is available here: (VIEW LINK)