UPDATE: Stifel Nicolaus Initiates Astec Industries at Hold on Compelling Investment Story

In a report published Wednesday, Stifel Nicolaus analyst Stanley Elliott initiated coverage on Astec Industries ASTE with a Hold rating.

In the report, Stifel Nicolaus noted, “We are initiating coverage of Astec industries with a Hold rating on the shares. Astec is a leading manufacturer of equipment and components that are primarily used in road construction, road maintenance, and related construction activities. The company services customers in over 150 countries across the infrastructure, energy, and mining end markets. Astec finished the March quarter with a net cash balance of $73 million, or $3.17 per share. This equates to 9% of the current market cap. Also this past March, Astec instituted a $0.10 quarterly dividend. We view Astec as a high quality name and believe the company offers a compelling investment story. We are initiating coverage with a Hold rating, primarily based on valuation. Shares of ASTE now trade at 9.3x our 2013 EBITDA estimate. We expect a potential total return in the high single, low double-digit range for the coming year, which is shy of the 20% threshold we typically require for a Buy rating.”

Astec Industries closed on Tuesday at $35.38.