Portfolio Manager Laton Spahr of OppenheimerFunds says one of his firm’s top holdings is Oshkosh Corporation (OSK). Spahr says the company has improved its free cash flow, which isn’t showing up in the multiple the market has put on the stock.
“That is something we look at a lot, where there is an underlying return-on-invested-capital improvement, you haven’t seen it reflect in any multiple expansion, and we saw that over the last 12 months or so within Oshkosh,” Spahr said.
FOR MORE INFORMATION ON THIS INTERVIEW CLICK HERE.
Spahr points to the concern about an inventory pricing issue at the company, but says his firm researched and found that Oshkosh’s strategy for dealing with the situation was strong. Additionally, the company’s end markets are showing ample opportunities.
“[In] a couple of their big markets, telehandlers are going through a regulatory-driven upgrade cycle. You have to upgrade these in order to meet new EPA guidelines around fuel efficiency,” Spahr said. “We are also seeing their aerial work platform business improve because that product is being used in more and more applications, such as single-family housing construction…You also have a cyclical pickup in nonresidential commercial construction, and you have a refresh cycle within their customer base in the residential channel.”
“Lastly, their military business has really suffered over the last two years because of the maturity at one of their programs, but they are rebidding for a very big contract that they will hear about in the next year. We don’t think that opportunity is priced into the stock at all,” Spahr added.
Denny’s Corporation (DENN) Sees Free Cash Flow and Renewed Earnings Growth with Turnaround Strategy
March 01, 2013
Dr Pepper Snapple Group Inc. (DPS) Sees Cash Flow Growth and 3.3% Dividend Yield, Looks to Reinvigorate Brands
August 05, 2013
Phil Skolnick Sees 50% Strip Pricing Cash Flow Margins for Oil Producers for First Time
February 11, 2022
Wyndam Worldwide Corporation (WYN) Delivers Up to $900 Million Free Cash Flow Per Year to Investors
December 02, 2013
Barrick Gold Corporation (USA) (ABX) Mines Anchor Free Cash Flow Generation for the Long Term
December 22, 2014
