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TITAN MACHINERY. Finance and Investment Club at UC Davis. 20/20 Foresight Chad Eatinger Malek Helo David Liu Kevin Yip. Company Profile. American company founded in 1980 and located in North Dakota. Operates in the Services sector and the Specialty Retail (other) industry.

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finance and investment club at uc davis

TITAN MACHINERY

Finance and Investment Club at UC Davis

20/20 Foresight

Chad Eatinger

Malek Helo

David Liu

Kevin Yip

slide2

Company Profile

  • American company founded in 1980 and located in North Dakota
  • Operates in the Services sector and the Specialty Retail (other) industry.
  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation

Sell and rent construction and

agricultural equipment

Titan Machinery

Sell parts

Service equipment at retail

stores

slide3

Company Overview (cont.)

  • Supplied primarily by CNH Global. CNH manufactures Titan’s construction and agricultural equipment.
  • Titan offers many auxiliary services:
  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
  • Around-the-clock servicing
  • Customer training programs
  • Notifying customers of periodic service requirements
  • Renting
  • Equipment transportation
  • GPS signal subscriptions
  • Financing/insurance
  • On-site repairs
slide4

Industry Analysis

Industry: Agriculture Equipment Retailer

  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
slide5

Industry Analysis

  • S&P 500 6 Mo
  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
  • Dow Jones 6 Mo
slide6

Industry Analysis

  • This industry, due to increase in demand for agricultural products worldwide, has been doing very well lately.
  • Strong Growth potential, as India and China continue to increase their demand for food.
  • As food prices continue to soar, agricultural producers are more willing to invest in more machinery to match the increase in demand with a higher supply.
  • Typically, a high debt to equity ratio.
  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
slide7

Key Statistics

  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
slide8

The Earnings Game…

  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
  • Fiscal 2008 Fourth Quarter Results:
    • Equipment sales up 66%
    • Part sales up 56%
    • Servicing revenue up 17%
  • Revenue up 61%
  • Gross Profit up 76%

Unfortunately, Titan announced it would sell 3.5 million of its shares that very same day

slide9

Technical Analysis

Strong RSI

  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation

W formation showing double bottom

Healthy MACD

slide10

SWOT Analysis - Strengths

  • Titan’s financials
    • Titan’s Price Earnings Ratio compared to industry and main competitor

~37.36 Titan

~18.69 Deere and Co.

~Industry is at 18.06

-Fast Growing

-60.90% per quarter: 17.50% Deere and Co.

-5.10% industry

    • Ag is HOT!!
    • Farmers will always need new Equipment- They are developing new TECH all day. Not only do they sell to Large farmers, but they supply to small households.
  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
slide11

SWOT Analysis - Weaknesses

  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
  • Low market capacity - 334.46M compared to Deere- Main competitor at 35.27 billion
  • 5.07M net income 1.95B net income
  • Low inventory turnover compared to industry
  • Small presence in the international market
    • Only in the USA.
    • Small market share.
slide12

SWOT Analysis - Opportunities

  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation

-Expansion on the horizon:

-In May 2008, the Company acquired Quad County Implement, Inc., a farm equipment dealership of CaseIH and brands in Blairstown, Iowa.

-They have the makings to expand their market.

-Agriculture is hot right now.

-Growth in the International market

slide13

SWOT Analysis - Threats

  • Debt comes back to haunt them in the long run
  • Low penetration into the international market.
  • Titan has a small market share, they cant overcome the dominance of Deere & Co. Deere will always be over their shoulder like a hawk.
  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation
slide14

Recommendation

We rate TITN a Moderate Buy at its current levels. With quarterly revenue growth over 60%, TITN is undertaking tremendous growth. The demand for agriculture equipment is at an all time high, and TITN is well positioned within its US market to take advantage of such strong demand. However, TITN remains susceptible to market fluctuations which is evident in the stock’s movements over the past month.

  • Company Profile
  • Industry Analysis
  • Key Statistics
  • Technical Analysis
  • SWOT Analysis
  • Recommendation