$BMI

Implied claim • moderate conviction • basis: multiple relative

This was a $230 a share stock a year ago. Uh, now it's a $130 share stock. Basically, this was trading for 55 times earnings. Today, we're trading for less than 30. Uh, 30 times earnings is not cheap for a stock that's, you know, posting negative 8% growth this year and then only expected to recover to 10% next year. But we do see very strong growth in recent years. uh several of them. I think this is just a highly cyclical company. If we see a negative double digit then 21gative -3 23gative -34 54. So this company has its es and flows. Uh it makes sense to me. It's a smaller name. I'm sure there it just you know it kind of rides the capex cycles with with the various industries that it uh sells into. But uh we do see look at this black line here. This is today's valuation. And this is even counting in the the negative earnings growth expected this year. That's $131 a share. So we're not that far off from where we we are today, first of all. And second of all, it's at the co lows. Just follow this black line down the chart. It bounced off of it in 2017. It bounced off of it in 2016, 2015. It hasn't really violated it until 2014. And then I did put the 22 times level. That that was a very strong support range for the stock post the Great Recession. Like look at this. this this jagged black line just basically rides this pink line from from 2009 to 2012 and then it rises up to this 30 times level where we are today. So I haven't bought shares yet. I am considering it. Look at this. It it is a dividend aristocrat according to Fast Graph. So I do love that. Um payout ratio is still very low. The dividend growth uh has been stellar in recent years as well. That caught my eye too. So, um, yeah, this one, ticker symbol BMI, is something that I'm I'm going to be diving into pretty heavily as as I get some free time in the coming days. I got to figure out kind of what prompted this selloff exactly. You guys look into this one, too. Let me know what you think. I'm just starting this process. That's why I left it to last, but the sell-off looks very interesting to me. We're near historical support levels, and we're not all that far from like a very, very strong long-term support level down here around 100 bucks a share at this 22 times level. So, uh, you know, we'd have to sell off another 35% to get there. But I could see that happening if, you know, the broader market dips 15 20%.

Explicit claim • strong conviction • basis: explicit term

valuation would suggest not cheap by all regards.

Implied claim • strong conviction • basis: drawdown discount

So guys, it's been a couple of months since we last covered Badger Meter, which I think is kind of a hidden gem in the world of dividend investing.