You’ll find portable storage company Mobile Mini’s boxes on construction sites, behind shopping centers, next to factories and warehouses. Anywhere, in fact, where someone needs extra storage space, and needs it fast.
With operations in 49 cities and plans to expand into 100 more, Mobile Mini is the major player in the portable storage business, managing a fleet of more than 110,000 moveable containers.
“It’s a simple business when you think about it,” notes Steven G. Bunger, Mobile Mini’s chairman and chief executive. “We’re renting a box.”
Mobile Mini is certainly impressing Wall Street. Thanks to its diverse customer base, aggressive marketing and variety of storage containers, the company has consistently met or exceeded earnings expectations over the last five years.
And last Thursday Mobile Mini announced record financial results for the second quarter, driven by growth in the mobile rental storage business — the latest evidence that the company and its stock price are flying high under the radar.
“We’re hitting on all cylinders right now,” said Bunger, adding that the Tempe, Ariz., company is substantially increasing earnings, and also increases in earnings before interest, taxes, depreciation and amortization. “And we’re seeing rental rate increases … we’re seeing yield increases,” he said.
“Our whole goal is we want to grow by one container at a time, focusing on what it takes to build our business,” Bunger added. “And our results are really going to speak for themselves, as they have over the last 7 or 8 years.”
Indeed, Mobile Mini’s share price has doubled over the last two years. But analysts who follow the firm, including Mark Grzymski of New York-based Needham & Co., say its stock price is still under-appreciated and undervalued. (Grzymski doesn’t own any of the company’s shares and has no banking conflicts.)
“They have a superior product and they do a great job of penetrating markets, new markets, as well as doing very well in their mature markets, and that’s tough to go up against,” Grzymski said.
With the average rental rate as low as $100 a month, many Mobile Mini customers sign long term leases, creating steady and reliable cash flow that the company can plough into new markets.
But some investors think Mobile Mini’s fortunes could eventually sink along with the overheated real estate market, and that could explain an increase in short selling of the company’s stock of roughly 7 percent this month.
Still, others say Mobile Mini’s diverse customer base means this company is more likely to rise and fall with the general economy, rather than any one specific sector.