Neutral - Price 40.48 on Feb. 3
by Sterne, Agee & Leach

We like VMI's diversified global structures business, including a leading utility-transmission-pole business that we expect to show solid growth [in coming] years and a traffic- and lighting-pole business that could benefit from stimulus spending as early as 2H09 as well as a new U.S. highway bill...offering support to VMI's three-to-five-year earnings-growth outlook. Before we can get more constructive on VMI, we need more visibility on the depth of the irrigation downturn. VMI now trades at a 9% relative P/E discount to the market based on our 2009E-EPS of $3.60. Market cap: $1 billion.

Vendor for VMI. Well run company.

PE of 16, a PEG of 0.80, and it pays a yield of 0.7%.

water infrastructure

Hot sector.

best infrastructure

1

Aug. 16, 2007

BUY

WALTER SCOTT, JR. , age 75, has been a director of the Corporation since 1988. For more than the past five years, he has been Chairman of the Board of Directors of Level 3 Communications, Inc., which is engaged in telecommunications and computer outsourcing and is a successor to certain businesses of Peter Kiewit Sons’ Inc. He is also a director of Commonwealth Telephone Enterprises, Inc., Peter Kiewit Sons’ Inc. and Valmont Industries Inc.