I Loved Modine Manufacturing At $16, Not So Much At $136 (Rating Downgrade)

Summary:

  • Modine Manufacturing’s shifted focus from auto engine to computer datacenter cooling is paying off on booming AI-related construction.
  • The stock has experienced a +710% total return over 3.5 years since my last bullish article, outperforming nearly all U.S. equities.
  • The current valuation is quite high with a forward P/E above 34x, despite only moderate forecasted company-wide sales growth of +10% and EPS gains of +20% yearly.
  • I am downgrading Modine to Sell, recommending avoidance until a significant selloff occurs.

Young Boy Businessman Wears Sad Face

RichVintage

Three years ago, Modine Manufacturing Company (NYSE:MOD) was in the process of exiting its auto engine cooling businesses to focus on computer datacenters. The company paid off high debt levels with the proceeds from its asset


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