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Wabash National Corp. Message Board

  • nvstysle nvstysle Jul 31, 2013 2:46 AM Flag

    The new Wabash era started today

    I've followed WNC since the mid-to-late 1990's. Over that time period, they've almost been through bankruptcy twice. Frankly, their manufacturing process was terrible and management was unfocused. Even in great economic times, Wabash's numbers never looked healthy. Margins were razor thin on trailers and their retail side was horrific. Truthfully, the only thing that kept them afloat (banks not pulling the trigger) was their Wabash brand name, their industry position and their customer base. Consequently, WNC's stock price would rise and fall to unbelievable levels, either reflecting bankruptcy fears, or on the other end, unjustified, highly inflated prices. It was rare to be able to actually put a p/e ratio on the stock. Until now...

    In my honest opinion, the Walker acquisition was the complete game-changer for WNC going forward. The company is now diversified, management is hugely disciplined, margins are significantly better (not only stand-alone, but of course combined due to the Walker acq), they have a more consistent annual revenue base, stronger cash flow generation w/ minimal debt maturities. WNC will earn over $1 per share annually over the next 5 years. Apply p/e multiples on $1+ eps and you'll get the point.

    The point being, WNC is hugely undervalued right now. Analyst eps estimates will need to be revised upward. Additionally, WNC is valued between $900 million to $1.3 billion - with a current market cap of $650 million, plenty of room for upside. The stock right now is easily worth $12, and should be $15-$18 based on various models. One thing is for sure, the stock hit a 52-week high of 11.47 on 7/16 - since then, the stock has dropped over 15%, losing more than $100 million in market cap - completely unjustified. I've been waiting for confirmation of the WNC story and today's numbers finally solidify the new Wabash era has begun.

    Sentiment: Strong Buy

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    • multi-year charts show a strong move upward

    • tfitts Aug 1, 2013 1:50 AM Flag

      I've only been following WNC for a year or two. I've traded in and out a few times this year. Bought 10,000 shares on Tuesday about 2 minutes before the market closed. I figured if their earnings were good they'd pop and if their earning were bad they'd still end up over $10.00 before too long. The drop from the previous high was completely unwarranted but I'm glad it happened because it gave me a chance to get back in. I sure would love if they climbed to the ranges you're talking about.

      Sentiment: Strong Buy

      • 1 Reply to tfitts
      • The stock is valued at the mid-to-high teens over the medium term horizon. Short term, once the stock holds $11, we'll see momentum pick up again significantly. Right now the market is digesting the large pop yesterday and isn't quite sure about an additional major move upward.

        The stock was trading at it's 52 week high of 11.47 two weeks ago - given the confirmation in the quarterly numbers, the stock will no doubt re-visit those levels and finally have the true break-out that has been deserved.

        One thing is certain, the same way that buying below $10 was a gift, people will shortly look back and wish that they bought under $11

    • Thoughtful, well-written post nv - Thank you. I think the part I like most in their PR yesterday is sales margin. Somewhere in the 14% range and rising. A good sign - and trailer fleets are still old on average and will need replacement in the near future. The Walker acquisition, if they handle the consolidation in a skillful and disciplined manner, ought to bear abundant fruit in coming years.

      Cheers to you and fellow Longs,

      Sentiment: Buy

12.10+0.40(+3.42%)Sep 2 4:02 PMEDT