Taken in isolation, things are going well for Commercial Vehicle (CVGI),
as the company’s management has executed pretty successfully on
cost-optimization and business restructuring efforts. The company also
has some future growth opportunities that could drive long-term revenue
growth above build rates, as truck and off-road vehicle manufactures add
more electrical components and systems to their vehicles. The “but” is
that Commercial Vehicle’s primary markets appear to be plateauing and it
may be hard for the shares to get ahead as near-term revenue growth
prospects diminish.
Holding cyclical stocks through
cyclical declines can be a painful test of patience. I do believe
Commercial Vehicle remains undervalued, but it’s tough to say how much
of the impending decline in truck production is already priced into the
shares. Investors with a longer term orientation may not care, but the
next year or so could be more challenging for the stock.
Read more here:
Commercial Vehicle Performing Well In A Plateauing Market
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