The outlook for manufacturing improved in December. The continued rebound in the housing market and auto sales that are projected to be over 15mm in 2013 also should provide some nice tailwinds to domestic manufacturing. The agricultural economy should also remain strong given, historically high Ag commodity prices. Given this, here are two cheap manufacturers that have had recent insider buying. Both are selling for five year projected PEGs of under 1 and seem like good buys for 2013.
Oshkosh (NYSE:OSK) - Oshkosh Corporation designs, manufactures, and markets a range of specialty vehicles and vehicle bodies worldwide.
4 reasons OSK is a buy at under $33 a share:
- An insider bought 12,000 shares in late November. This was the first insider purchase since early May.
- The company has easily beat earnings estimates for five straight quarters. The average beat over consensus has been around 40% over that time span.
- Consensus earnings estimates for both FY2012 and FY2013 have increased nicely over the last three months.
- OSK has a five year projected PEG of under 1 (.93). It also just won a $195mm contract to build armored trucks.
AGCO Corporation (NYSE:AGCO) manufactures and distributes agricultural equipment and related replacement parts worldwide.
4 reasons AGCO is bargain priced at just $51 a share:
- Insiders have been consistent buyers of the shares for most of the last year.
- The stock sells for just over 9x forward earnings, a discount to its five year average (14.0).
- AGCO sells near the bottom of its five year valuation range based on P/E, P/S, P/CF and P/B.
- The stock has a five year projected PEG of under 1 (.89). The drought in the Midwest also seems to be having no impact on agricultural equipment sales.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AGCO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.