Billionaire Ken Griffin Enters The Ring At Navistar

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Oshkosh actually looks like it might be a good deal based on current financials, at 13 times trailing earnings. Naturally it’s important to look more closely at the company before making any decision, particularly one as exposed to the broader economy as Oshkosh- the stock’s beta is 2.1- but further research may be worth it. Other peers include PACCAR Inc (NASDAQ:PCAR) and Hyster-Yale Materials Handling Inc (NYSE:HY). These companies trade at low earnings multiples as well: their forward P/Es, for 2013, are 14 and 11 respectively. However, each of them also reported a decline in revenue in the third quarter of 2012 versus a year earlier.

It’s interesting to see Citadel get involved in Navistar, and see if this adds any complications to how the company is managed going forward. However, we don’t think that investors should necessarily follow Griffin and his team into this investment. Navistar is still struggling and piling up losses, and we would prefer to see it at least getting close to profitability before considering it as a value investment. The forward earnings projections are a bit speculative to use at this point, particularly coming from sell-side analysts.

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