On Tuesday, Miller Industries (NYSE:MLR) was included on DA Davidson's STAMPEDE list, which highlights stocks with potential upside due to event-driven catalysts. The company, known for its vehicle towing and recovery equipment, has become the subject of an activist campaign pushing for significant changes.
The activist investor has proposed a variety of modifications, from altering the composition of the company's board to changing its business practices. Furthermore, they have suggested that the board should consider selling the company outright. In response to these pressures, Miller Industries has already taken steps such as increasing its dividend and initiating a new share repurchase program.
The company has also stepped up its engagement with both sell-side and buy-side analysts and investors, which has been positively received. However, Miller Industries maintains that its current strategy is the most appropriate course of action for the company's future.
DA Davidson has set a price target of $82 for Miller Industries stock and affirms a BUY rating. The firm's stance is neutral regarding the ongoing activist campaign, but they highlight that regardless of the outcome, there appears to be a beneficial path for investors. The inclusion on the STAMPEDE list suggests that DA Davidson sees a potential for shareholder value creation amid the unfolding events.
InvestingPro Insights
Miller Industries' recent inclusion in DA Davidson's STAMPEDE list is further supported by several key financial metrics and insights from InvestingPro. The company's P/E ratio of 9.55 indicates that it's trading at a low earnings multiple, aligning with one of the InvestingPro Tips. This valuation metric suggests that the stock may be undervalued relative to its earnings, potentially offering an attractive entry point for investors.
Additionally, Miller Industries has demonstrated strong financial performance, with a revenue growth of 27.44% over the last twelve months as of Q2 2024. This robust growth is complemented by an impressive EBITDA growth of 66.8% over the same period, indicating improved operational efficiency and profitability.
InvestingPro Tips also highlight that Miller Industries has maintained dividend payments for 15 consecutive years, showcasing its commitment to shareholder returns. This is particularly relevant given the company's recent increase in dividend as a response to activist pressures. The current dividend yield stands at 1.25%, offering a steady income stream to investors.
For those interested in a deeper analysis, InvestingPro offers 7 additional tips for Miller Industries, providing a more comprehensive view of the company's financial health and market position.
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