Manitowoc (NYS: MTW) has been performing pretty well, and consistently so. Yet it is getting hammered by Mr. Market. Although its shares have shed 32% in the past three months, this throws up a great opportunity for long-term investors. Here's why.

Remaining hopeful
Manitowoc's core business -- cranes -- has bounced back strongly after the financial crisis. The fourth quarter, in particular, set the ball rolling with sales growth hitting the highest year-over-year rate since 2007 and new orders climbing to levels last seen in 2008.

The company kicked off 2012 on a solid note, too, with the division's first-quarter backlog value reaching its highest level since the recession. Things are going great in the industry, and that should continue to be the case, at least in the near future. If it weren't so, why would Caterpillar (NYS: CAT) raise its full-year guidance and aim for a record-breaking 2012? Why would Terex (NYS: TEX) be so confident about its target of a 15%-20% rise in net sales for the full year?


If the outlook for industry peers isn't enough to excite you, data from the U.S. Census Bureau should. The dollar value of total "construction put in place" in March and February was, respectively, 6% and 5.8% higher than last year. That's enough evidence of a revival in the U.S. construction market, isn't it?

The other business Manitowoc operates in, food-service equipment, looks poised for a good year, too. Riding on the success of products launched last year, the company expects revenue from this division to grow by a "high single-digit percentage" for the full year. It looks achievable, as some of these products are already playing a significant role in pushing up the division's top line. And when major fast-food chains like McDonald's recognize a company's products, we know they're promising.

Strengthening the base
I had earlier written about some weaknesses that were troubling Manitowoc. But the company is taking initiatives to turn them around. Of top priority is debt reduction. Manitowoc's total debt-to-equity ratio is high at 412.6%. A cash balance of just $71 million and an interest coverage ratio of 1.6 times aren't comforting enough. The company aims to strike off nearly $150 million to $200 million worth of debt this year. While reducing interest expenses, this move will also impart health to overall financials.

The other area where Manitowoc is bucking up is increasing presence in the rapidly growing emerging markets. Kicking off manufacturing of rough-terrain cranes at its new facility in Brazil last month, it became the first player to make such cranes in the country. The time is ripe, as the nation gears up for the 2014 World Cup and 2016 Summer Olympics. Both Cat and Terex are expanding in this region.

New stores and product launches in the developing markets are also in the pipeline to bolster Manitowoc's other business. After Singapore and China, it opened a test kitchen in India during the first quarter.

The Foolish bottom line
Operational performance and growth plans look fine, but is Manitowoc's stock cheap? Well, it might not look like the best bet based on its trailing P/E of 24.6, which lies midway between Cat's P/E of 13.6 and Terex's P/E of 36. But considering how dramatically its forward P/E drops off to 11, one can expect a good degree of growth in earnings, as well as a possible upside for the stock.

I see no reason why Manitowoc shouldn't be a part of your stock watchlist. Click here to add it now.

In addition to Manitowoc, there are three companies whose international growth stories we're particularly bullish on. If the trend continues, investors could be looking at internationally fueled new stock highs. Uncover them in our special free report "3 American Companies Set to Dominate the World." The report won't be available forever, so we invite you to enjoy a free copy today. You can access it by clicking here. Enjoy, and Fool on!

At the time this article was published Neha Chamaria does not own shares of any of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of McDonald's. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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