Unlike truck builder PACCAR (PCAR) and commercial vehicle engine builder Cummins (CMI), Commercial Vehicle Group (CVGI)
has yet to benefit the market's willingness to overlook tough current
conditions in the trucking industry and transition to the
recovery/rebound. But with about one-quarter of the company's sales
coming from the construction sector, and construction-exposed companies
like Caterpillar (CAT) and Deere (DE) still lagging, perhaps that's not entirely unreasonable.
Commercial
Vehicle Group's new CEO is saying all of the right things. The company
is going to focus on greater market diversification and greater customer
penetration (selling more components to the same customers), continue
to look for accretion deals, and aggressively extend operations in areas
like China and India. At the same time, management continues to operate
a relatively flexible operating structure, and is considering further
changes to its manufacturing footprint to reduce costs. That all sounds
good, and the shares do seem undervalued, but it's likely to leave the
market unimpressed until and unless the company starts beating analyst
targets again.
Continue reading here:
Commercial Vehicle Still Idling
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