Activist Investor Mark Rachesky Boosts His Bullish Stake In Navistar International Corporation (NAV)

Navistar’s market share endured a serious slump in 2012, when the engines the company was designing and manufacturing did not comply with the tough new federal standards for diesel-engine exhaust that were implemented around that time. However, 2013 marked a new beginning for Navistar, as it managed to fix its engine problems by using exhaust-treatment components and popular engine models constructed by Cummins Inc., which indeed assisted the company in recovering its market share. Some analysts claim that Navistar has been steadily recovering from its near failure in 2012, but that the full recovery is still ahead. As the U.S. economy has been gaining pace lately, the demand for all manner of commercial trucks has been increasing as well. Hence, Navistar will definitely benefit from this positive outlook on the U.S. economy if it manages to properly run its activities and operations. In addition to that, the company has been focusing on improving its core North American Truck and Parts businesses recently by closing or divesting non-core/non-strategic businesses. Navistar has been constantly seeking opportunities to restructure its business and increasr the efficiency of its operations in order to optimize its cost structure.

Nevertheless, even though Navistar’s cost-cutting initiatives and margin improvements assisted the company in narrowing its loss for the fiscal second quarter of 2015 that ended on April 30, analysts’ expectations were still missed. But there is no doubt that Navistar has experienced great improvements lately, with an adjusted net loss from continuing operations of $0.57 per share, substantially narrower than the adjusted net loss of $1.45 per share reported in the same quarter a year ago. Navistar reported revenues of $2.66 billion for the fiscal second quarter of the year, lower by 1.9% year-over-year. Despite missing the expectations for the most recent quarter, which negatively influenced the company’s share price, Navistar expects that 2016 will be a strong year for the North American industry and for the company itself. Precisely, Navistar is set to take advantage of the current and potential favorable market conditions and achieve its long-awaited turnaround. Within our database, the activist hedge fund managed by the aforementioned Carl Icahn, Icahn Capital LP, represents the largest investor in Navistar International Corporation (NYSE:NAV), with 16.27 million shares.

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