Marmon Crane Services, Inc. is a business sector within The Marmon Group and a Berkshire Hathaway company. The Marmon Group is an international association of about 185 manufacturing and service businesses that operate independently within 11 diverse, stand-alone business sectors, with collective revenues of approximately US $8 billion. Berkshire Hathaway and its subsidiaries engage in a number of diverse business activities including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, retailing and services. Common stock of Berkshire Hathaway is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.
Marmon Crane Services companies include Sterling Crane (Canada and USA); Freo Group Pty Ltd (Australia); Sterling Logistics Inc. and Procrane Sales Inc.
Their run-rate quarterly EBITDA was actually approx 15m pre Covid. Once you normalize, you actually get close to 60m of EBITDA per annum bringing the multiple down to only 3x. Stock already up to 44.5p over last few days. There seems little risk here given low leverage of the company (<2x levered so could be investment grade company) so happy to have a concentrated investment strategy... Think main risk here is that it might take a few months for the stock to recover as no-one looks at these small cap stocks.
Interestingly they discontinued quarterly reporting recently. I wonder if the founding family is laying the groundwork to pay a premium to take the company private. Their family behind their main competitor Tat Hong did the same. Nice short-term gain but I would not sell below 1x book value. United Rental (US rental business) trades at 7x EBITDA and close to 4x price to book value. What am I missing ?
Company has delevered so much that they should look for acquisition targets (eg Boom Logistics, trades at 3x EBITDA and 40% of asset value). Would give them scale and maybe then institutional shareholders would invest...