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Toromont Industries (TIH TSX)
Most recent purchase March 2022 at $109
Here’s a large equipment deal in Canada. Toromont sells, rents and services Caterpillar construction equipment. The dealer market is on fire right now as it’s hard to get new equipment, so many are buying used equipment and doing more repairs on older machines.
Pricing power in this industry is very high right now with equipment in short supply, and TIH has record backlog for equipment, so visibility into future quarters remains quite high. As provincial and federal governments continue to focus on improving the infrastructure footprint across Canada, TIH will be a beneficiary of increased workloads.
Margins continue to improve, EPS growth should be around 15 per cent in 2022 and the company has a pristine balance sheet to use for future acquisitions when more CAT dealers come up for sale. They have an excellent management team with a long history of solid capital allocation and execution.
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