FPA Queens Road Small Cap Value Fund on Terex Corporation
Thesis
Terex makes specialist vehicles and equipment for emergency services, waste handling, utilities and materials processing. The fund obtained the holding through a transaction involving REV Group and sees an improved product portfolio under current management. The company is working to dispose of its more cyclical aerials unit, with shares priced around eleven times current-year earnings.
“We think shares are attractively priced at roughly 11x this year’s earnings.”
Key risks
- Cyclical exposure of the aerials business
- Execution of the planned aerials divestment
- Integration and portfolio restructuring risks