I found it a little odd late last year that Oshkosh (OSK) was trading at a 52-week high amid a pretty widely-held expectation that the company's business was looking at a cyclical downturn. While the downturn was expected to be brief at that point, the advent of the COVID-19 pandemic threw all of the company's markets outside of defense into chaos, prompting a severe downturn in the highly economically-sensitive Access Equipment business.
The share price performance has been decidedly mixed since then. Down about 20%, the shares have outperformed the broader industrial sector, as well as some peers/comps in construction like Caterpillar (CAT), Komatsu (OTCPK:KMTUY), and Volvo (OTCPK:VOLVY) but have also outperformed others like CNH (CNHI), Manitowoc (MTW), and Terex (TEX). I've been impressed by management's ability to hit its sub-20% decremental margin target, and while there is a lot of uncertainty about Oshkosh's core markets over the next couple of years, I think the risk/reward is appealing today - one of the few machinery stocks where I can say that.
Follow this link to the full article:
Oshkosh Deserves More Credit For Margin Improvements And Recovery Potential
No comments:
Post a Comment