Oshkosh Corporation (OSK), Paccar (PCAR): On the Road Again With Navistar International Corp (NAV)

Not the path least taken
I agree the new road Navistar International Corp (NYSE:NAV) is on is a better traveled one than the path it had been heading down. Last year, I suspected management had largely realized the mistakes it made and was committed to turning the big rig around, so I marked it to outperform the broad indexes on Motley Fool CAPS as a means of holding myself accountable for bullish sentiments at the time.

Since then, the stock has risen 32% compared with a 17.5% gain in the S&P 500. Over the past year, shares have risen 77%, but I think now it’s time to see if this plan pays off. Its engines are still undergoing review by the EPA, and its warranty repairs for trucks built since 2010 still have to be made. It says those costs should be reduced going forward, and Navistar International Corp (NYSE:NAV) expects the EPA endorsement to come by the end of the month. If that happens, the new engines will hit the market in April. The question investors have to decide is whether truckers will start buying its rigs again, having damaged itself through the misguided plan it followed.

Navistar International Corp (NYSE:NAV) isn’t profitable now, and though it has a plan in place to reach breakeven again, it still has a long road ahead of it. The easy money has been made it seems and a narrower focus suggests that while growth is still probable, it may not be the vaunted gains it’s already achieved.

I’m not sure it will be the same growth story from here, but let me know in the comments box below if you think Navistar is still on the road to success or, having pulled onto the shoulder, if it will see better financed and prepared rivals pass it by.

The article On the Road Again With Navistar originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Cummins, Ford, and Paccar.

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