MTOR

Meritor Inc

Industrial/Transportation


Presented:12/06/2019
Price:$24.04
Cap:$1.88B
Current Price:$36.50
Cap:$2.59B

Presented

Date12/06/2019
Price$24.04
Market Cap$1.88B
Ent Value$2.42B
P/E Ratio7.1x
Book Value$4.73
Div Yield0%
Shares O/S78.13M
Ave Daily Vol1,040,953
Short IntN/A

Current

Price$36.50
Market Cap$2.59B
Meritor, Inc. engages in the design, production, and trade of integrated systems, modules, and components to original equipment manufacturers. It operates through the following segments: Commercial Truck and Trailer, and Aftermarket and Industrial. The Commercial Truck and Trailer segment supplies drivetrain systems and components, including axles, drivelines, and braking and suspension systems, primarily for medium- and heavy-duty trucks and other applications. The Aftermarket and Trailer segment provides axles, brakes, drivelines, suspension parts and other replacement parts to commercial vehicle and industrial aftermarket customers in North America and Europe. The company was founded in 1909 and is headquartered in Troy, MI.

Publicly traded companies mentioned herein: Allison Transmission Holdings Inc (ALSN), Barclays PLC (BARC LN), Cummins Inc (CMI), Meritor Inc (MTOR), PACCAR Inc (PCAR)

Highlights

The presenter is long shares of Meritor Inc (MTOR), the <$2B market cap supplier of parts such as axles for Class 5 – 8 trucks and off-road vehicles (e.g., cranes and firetrucks). Although 60% of the business is in North America (with the remaining 40% spread across the world), Street coverage is thin and he doesn’t believe investors have fully appreciated both the upcoming fleet replacements and MTOR’s aggressive share buyback plan. On the back of these catalysts and margin improvement, the presenter sees ~50% share price upside from the current $23 per share to the mid-$30 range in the next year. 

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Idea Discussion

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