24.02.2006

JLG announces stock split

JLG Industries, Inc. has announced a two for one stock split doubling the number of ordinary shares in circulation. This is the 12th split. It also declared an increased quarterly dividend of one cent per share.

The new shares will be distributed on March 27, 2006 to shareholders of record on March 13, 2006.

"As JLG continues to grow and deliver improved results, today's announcement reflects the Board's confidence in our ability to execute our strategic plan," stated Bill Lasky, chairman, president and chief executive officer. "We are committed to the relentless pursuit of quality and process excellence as we continue to remain focused on our core products and services and to leverage our position as the world's leading producer of access equipment."

Vertikal Comment

JLG shares have sailed past the projections of most analysts, many of whom forecast a 2006 high of around $52. (A year ago the shares were languishing around the $17 level), They are currently $57 and rising. Over the long term JLG has been a fantastic investment, with $1,000 invested in 1990 now worth $410,000 a 4,000 percent return!

So what of the future? Certainly for the short term JLG stock looks to be a good investment, with fiscal 2006 results likely to justify a pre split price of $60 or more. The real challenge will come as the company starts to produce the CAT line. While the agreement will certainly add revenue, will it add profit?

One of the reasons CAT sold the business was its inability to turn a decent margin on telehandlers. (As well as the need for the production space). When it comes to production and operations capability JLG has demonstrated strong skills in recent years. So if recent performance is anything to go by yes it will.