FPA Queens Road Small Cap Value Fund on JBT Marel Corporation
Thesis
JBT Marel sells food-processing equipment into protein and packaged food and beverages. Aftermarket parts and services supply about half of sales, while end markets are relatively noncyclical and management has a record of improving margins. The fund added shares at under 15 times earnings after customer-profitability fears pressured the stock.
“We have been pleased to add shares at less than 15 times this year’s earnings.”
Key risks
- Profitability pressure among protein customers
- The company missed second-quarter earnings
- Weak customer investment in processing equipment