written by reader Middleby (MIDD)

By xiexgp@gmail.com, November 6, 2013

Does anyone have an opinion about The Middleby Corporation (MIDD)? Motley fool recommended it a while ago…
Thanks in advance.

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Travis Johnson, Stock Gumshoe
November 6, 2013 2:11 pm

I have not looked at that one in a long time, but it was a legitimately spectacular pick from Tom Gardner many years ago at the Fool — I think he started recommending it early in their initial turnaround in the mid-2000s around $20 a share (it’s over $200 now), and I know they kept featuring it as a favorite for many years up to $50 and $100 at least.

But that said, I don’t know much about their current prospects, they’re not a cheap or easy buy any more but they are still growing nicely — their big drivers in the past were fast cooking products, the conveyor ovens you see in sandwich shops now and the combo oven/microwave things in Starbucks that can heat a roll in 30 seconds without making it mushy.

They are likely still quite levered to growth in quick service restaurants around the world and analysts think they’re still growing 20% a year for the next five years, which would make the current price justifiable, but I have no idea what the competitive landscape looks like in their business now.

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November 10, 2013 11:20 am

Somebody please help us novices: Middleby has a PE multiple of 28, and a three-year EPS growth rate of 27%. So it’s priced for growth. If it continues to grow at 20% plus, the share price will increase. And if it falls to something more normal, like 8% (analyst’s view on the current quarter = 12%) the multiple – and therefore the share price- will fall. Making sense or showing my ignorance (which is OK). Thanks to whoever pitches in on this one.

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