Seeking Alpha: Commercial Vehicle Making Progress, But It's Not Pretty

The turnaround story at Commercial Vehicle Group (CVGI) is moving along at a painfully slow pace, but is moving along. New senior management (both the CEO and CFO have been at the company less than a year) has a lot on its plate, ranging from shifting the R&D process to a more customer/application-specific approach to enhancing productivity to positioning the company for growth in large markets like agriculture and Chinese heavy vehicles.

All of this takes time, and not all of the factors necessary for better results are within management's control. While I wouldn't overlook other quality stories leveraged to commercial vehicles, like Cummins (CMI) or Eaton (ETN), I'm still willing to wait and see if new management at CVGI can deliver better results as the truck and construction cycles turn around. I think reasonable fair value (considering the risks and cyclicality) is around $9.50 today, but simply de-risking the story to a point where Commercial Vehicle would be on par with companies like Allison (ALSN), Cummins, and Eaton would add over $2 per share to fair value.

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Commercial Vehicle Making Progress, But It's Not Pretty