Summary of SMid Cap Industrials Conference Call Industry Overview - **Industry Focus**: North America Small and Mid Cap Industrials, particularly in AI infrastructure and related sectors [1][3][4] - **Key Themes**: - Market penetration within untapped Total Addressable Market (TAM) - Broad infrastructure investments - Nuclear power growth and safety - Electrification and automation trends [4][9] Company Insights APi Group (APG) - **Rating**: Overweight - **Current Price**: $37.4 - **Price Target**: $42 (12.1% upside) - **Market Cap**: $15.563 billion - **P/E Ratio**: 30.4x - **Revenue Growth CAGR**: 8% [3][6] Mirion Technologies (MIR) - **Rating**: Overweight - **Current Price**: $24.0 - **Price Target**: $34 (41.5% upside) - **Market Cap**: $5.955 billion - **P/E Ratio**: 57.3x - **Revenue Growth CAGR**: 2% [3][10] Rollins Inc. (ROL) - **Rating**: Overweight - **Current Price**: $59.4 - **Price Target**: $70 (17.9% upside) - **Market Cap**: $28.763 billion - **P/E Ratio**: 59.2x - **Revenue Growth CAGR**: 25% [3][6] Valmont Industries (VMI) - **Rating**: Overweight - **Current Price**: $391.2 - **Price Target**: $480 (22.7% upside) - **Market Cap**: $7.706 billion - **P/E Ratio**: 22.5x - **Revenue Growth CAGR**: 13% [3][13] Gates Industrial Corp (GTES) - **Rating**: Overweight - **Current Price**: $21.5 - **Price Target**: $33 (53.2% upside) - **Market Cap**: $5.563 billion - **P/E Ratio**: 15.5x - **Revenue Growth CAGR**: 7% [3][6] Regal Rexnord (RRX) - **Rating**: Overweight - **Current Price**: $131.0 - **Price Target**: $190 (45.0% upside) - **Market Cap**: $8.696 billion - **P/E Ratio**: 14.4x - **Revenue Growth CAGR**: 5% [3][6] Key Industry Trends - **Data Center Demand**: Expected electricity consumption from data centers to reach ~1,100 TWh by 2028, with a power installed base growing to 242GW by 2028 [22][24] - **Capex Growth**: Anticipated ~55% increase in annual grid investments from 2024 to 2030, driven by rising power consumption and infrastructure needs [31][32] - **Nuclear Power**: Significant partnerships with hyperscalers for nuclear energy supply, indicating a shift towards sustainable energy sources [37][45] Competitive Landscape - **Mirion Technologies**: Leading in nuclear safety technologies with a strong market share in 17 of 19 markets served, focusing on radiation safety and medical applications [52][54] - **Valmont Industries**: Positioned as a global leader in irrigation equipment and infrastructure solutions, benefiting from utility and telecommunications demand [91][96] Financial Metrics - **Average P/E Ratio**: 26.4x across covered companies - **Average Revenue Growth CAGR**: 14% for the sector [3][6] Conclusion - The SMid Cap Industrials sector is poised for growth driven by infrastructure investments, data center demand, and nuclear energy partnerships. Companies like Mirion and Valmont are well-positioned to capitalize on these trends, with strong financial metrics and growth potential.

Core Points - The presentation is hosted by Trent Meyer, an industrial analyst from Baird, focusing on Valmont Industries [1] - Avner Applbaum, President and CEO of Valmont, and Renee Campbell, Senior VP of Investor Relations and Treasurer, are key speakers [1] - The format includes a presentation followed by a Q&A session for attendees [1][2]

Valmont Industries FY Conference Summary Company Overview - **Company**: Valmont Industries (NYSE: VMI) - **Market Cap**: Approximately $8 billion - **Segments**: 75% Infrastructure, 25% Agriculture - **Employee Count**: 11,000 employees across more than 100 countries - **Sales Distribution**: 70% in North America, 30% globally [5][4][3] Key Points and Arguments Growth Strategy and Financial Performance - **Earnings Growth**: Earnings per share (EPS) more than doubled since 2020, with a return on invested capital increasing to 16.4% [3][4] - **Future Projections**: Plans to drive growth of $500 million to $700 million, targeting incremental EPS of $7 to $12, aiming for a total EPS of $25 to $30 [4][19] - **Operating Income**: Despite plateauing net sales, operating income has doubled, indicating strong cost management and productivity [21][20] Infrastructure Market Drivers - **Aging Infrastructure**: Significant need for replacement of aging infrastructure, particularly utility poles and lighting systems, many dating back to the 1950s and 1960s [6][7] - **Energy Transition**: Increased power consumption driven by electrification, AI, and data centers, necessitating infrastructure upgrades [8][9] - **Utility Demand**: Strong demand in the utility sector, with plans to expand capacity to meet this demand [18][26] Agriculture Market Insights - **Cyclical Nature**: Agriculture is currently in a trough, but long-term drivers such as food security and population growth remain strong [12][13] - **Irrigation Solutions**: Valmont's irrigation solutions can significantly increase crop yields, with examples showing up to 280% yield increase for corn [15][16] - **International Growth**: Focus on expanding international sales, particularly in Brazil and regions like the Middle East and Africa, where food security is a priority [17][36] Capital Allocation and Shareholder Returns - **Balanced Approach**: Emphasis on disciplined capital allocation, including a $700 million share buyback program and consistent dividend increases [24][25] - **Investment in Growth**: Approximately $150 million per year in capital expenditures, with $100 million directed towards growth opportunities [23][24] - **M&A Strategy**: Selective and strategic acquisitions aimed at enhancing core competencies, particularly in agriculture and infrastructure [24][37] Operational Efficiency and Market Position - **Competitive Advantage**: Valmont's engineering and manufacturing expertise provide unmatched value in the infrastructure market [4][19] - **Capacity Constraints**: The industry is facing capacity constraints, which Valmont aims to address through investments in its facilities and workforce [20][33] - **Long-term Outlook**: Positive outlook for future growth driven by strong market demand and operational efficiencies [27][31] Additional Important Insights - **Technological Integration**: Use of technology in agriculture to optimize irrigation and improve efficiency [16] - **Market Adaptation**: Adjustments made in response to market conditions, including exiting certain solar markets to focus on Europe [20] - **Customer Relationships**: Strong customer relationships and a broad product portfolio support Valmont's market position [10][11] This summary encapsulates the key insights from the Valmont Industries FY Conference, highlighting the company's strategic focus on growth, infrastructure modernization, and agricultural innovation while maintaining a disciplined approach to capital allocation and shareholder returns.

Group 1 - The analyst has over 15 years of experience in investing and has provided research services to mid-sized hedge funds with assets under management between $100 million and $500 million [1] - The focus is on medium-term investing in ideas with catalysts to unlock value or short selling in case of downside catalysts [1] - The analyst has a generalist approach but has higher conviction in the industrial, consumer, and technology sectors due to extensive professional experience [1]

Core Viewpoint - Valmont Industries, Inc. is participating in Baird's 55th Annual Global Industrial Conference, indicating its commitment to engaging with investors and showcasing its industry leadership [1] Company Participation - Management, including President and CEO Avner M. Applbaum and Senior Vice President of Investor Relations & Treasurer Renee Campbell, will host investor meetings on November 12 [1]

Core Viewpoint - Valmont Industries (NYSE: VMI) is recommended as a buy due to its strong positioning to benefit from long-term growth driven by secular tailwinds in infrastructure, grid modernization, renewable integration, and 5G [1] Investment Strategy - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - A bottom-up analysis is employed to assess the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Viewpoint - Valmont Industries (NYSE: VMI) is recommended as a buy due to its strong positioning to benefit from long-term growth driven by secular tailwinds in infrastructure, particularly in grid modernization, renewable integration, and 5G [1] Investment Strategy - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - A bottom-up analysis is employed to assess the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Insights - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] - Valmont Industries (VMI) currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The Zacks Rank for Valmont Industries is 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Price Performance - VMI shares have increased by 3.82% over the past week, outperforming the Zacks Steel - Pipe and Tube industry, which rose by 1.3% [5] - Over the past month, VMI's price change is 8.92%, significantly higher than the industry's 2.14% [5] - In the last quarter, VMI shares rose by 10.15%, and over the past year, they gained 23.21%, while the S&P 500 increased by 6.56% and 15.83%, respectively [6] Trading Volume - The average 20-day trading volume for VMI is 157,152 shares, which serves as a baseline for price-to-volume analysis [7] Earnings Outlook - In the past two months, three earnings estimates for VMI have been revised upwards, while none have been lowered, raising the consensus estimate from $18.63 to $19.02 [9] - For the next fiscal year, one estimate has increased, while one has decreased during the same period [9] Conclusion - Considering the strong price performance, positive earnings revisions, and high Momentum Style Score, VMI is identified as a solid momentum pick and is recommended for investors looking for potential near-term gains [11]

Core Insights - Valmont Industries, Inc. (VMI) reported third-quarter 2025 earnings of $4.98 per share, a 21% increase from $4.11 in the same quarter last year, surpassing the Zacks Consensus Estimate of $4.64 [1] - The company's profits reached $99.03 million, up from $83.07 million year over year [1] - VMI's revenues for the third quarter were $1,046 million, reflecting a 2.5% year-over-year increase and exceeding the Zacks Consensus Estimate of $1,038.8 million [1][8] Segment Performance - Infrastructure segment revenues increased by 6.6% year over year to $808.3 million, driven by strong utility demand and improved factory throughput, surpassing the estimate of $772.4 million [2] - Utility sales rose by 12.3% due to favorable pricing and higher volumes, while telecommunications sales grew significantly due to effective execution aligned with carrier investment programs [3] - Coatings revenue also saw an increase, but these gains were partially offset by a decline in Solar sales and reduced Lighting & Transportation sales in the Asia-Pacific region [3] Agriculture Segment - Agriculture revenue declined by approximately 9% year over year to $241.3 million, missing the estimate of $263.7 million, primarily due to weaker demand for irrigation equipment and macroeconomic challenges [4] - International sales faced additional pressure from project sales timing in the Middle East, while North American agricultural demand remained soft [4] Financial Overview - The company ended the quarter with cash and cash equivalents of $226.1 million, with cash provided by operating activities at $345.2 million, down 32% year over year [5] - VMI returned $39.2 million to shareholders through dividends and share repurchases during the quarter and invested $41.9 million in capital expenditures for growth initiatives [5] 2025 Outlook - VMI updated its full-year 2025 guidance, anticipating net sales of approximately $4.1 billion, with infrastructure segment revenue of around $3.1 billion and agriculture segment revenue of about $1 billion [6] - The adjusted earnings per share outlook was raised to a range of $18.70 to $19.50 from the previous range of $17.50 to $19.50, with capital expenditure expected to be between $140 million and $160 million [6] Stock Performance - VMI's shares have increased by 25.1% over the past year, outperforming the industry's rise of 15.5% [7]

Core Insights - Valmont Industries (VMI) reported revenue of $1.05 billion for the quarter ended September 2025, marking a year-over-year increase of 2.5% and an EPS of $4.98 compared to $4.11 a year ago, exceeding the Zacks Consensus Estimate of $1.04 billion by +0.69% and delivering an EPS surprise of +7.33% [1] Financial Performance - Total Sales- Intersegment: Reported at $-3.64 million, slightly better than the average estimate of $-4.03 million, representing a year-over-year change of -1.3% [4] - Net Sales- Agriculture: Reported at $239.42 million, compared to the estimated $233.58 million, reflecting a year-over-year decline of -9.2% [4] - Total Sales- Infrastructure: Reported at $808.29 million, exceeding the average estimate of $790.13 million, with a year-over-year increase of +6.6% [4] - Adjusted Operating Income- Infrastructure: Reported at $143.38 million, surpassing the estimate of $130.39 million [4] - Adjusted Operating Income- Agriculture: Reported at $23.19 million, below the estimate of $28.6 million [4] Stock Performance - Valmont's shares have returned +8.9% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]