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Oshkosh: Parts In Search Of A Cohesive Whole

Mar. 23, 2023 1:39 PM ETOshkosh Corporation (OSK)GM, PCAR, REVG, RSG, TEX, WM1 Comment


  • Oshkosh has several distinct lines of heavy machinery business, but no overarching theme to connect them that we can identify.
  • Each segment is facing its own unique headwinds, and management is responding by attempting to pivot the business towards less capital-intensive, higher margin opportunities.
  • The fairly new executive team's moves over the last few years also stand out to us as a cause for concern.
  • Taken together, we're very pessimistic about the medium-term prospects: The core fundamentals are overvalued, and capital management could exacerbate any significant drawdown.

Detail of a red Pierce fire truck at the old Pontiac Fire Department in Pontiac, Illinois, USA

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Our contributions to date have been almost exclusively focused on biotech companies, but another major focus area in our circle of competence is industrials and manufacturing. The two sectors share a bit of similarity: biotech companies have to

Consensus EPS Revision Trend for Oshkosh

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Consensus Revenue Revision Trend for Oshkosh

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Line chart showing Oshkosh's Weighted Average Cost of Capital from 2014 to present.

Cost of equity computed using CAPM with a 60-month beta. (Author's own work)

A Teupen spider-style atrium lift in Moynihan Train Hall in Penn Station, New York

A Teupen spider-style atrium lift in Moynihan Train Hall in Penn Station, New York (Author's own photograph)

This article was written by

Hello! We're Derek and Betsy, a husband-and-wife investment duo. Our experiences include academia, fintech, software engineering, manufacturing and corporate finance. We're value investors who know our circle of competence and have a healthy appreciation for macroeconomic trends. We're also working to develop more robust quantitative fundamental valuation models. Our portfolio is focused on capital appreciation at a fair price with a section dedicated to high income generation. We have the goal to become financially independent so that we devote more time to helping our investments grow.We appreciate everyone who takes the time to view our content and engage with us in the comments. Interacting with the investment community is one of the biggest reasons we've started contributing. Please don't hesitate to reach out to share your thoughts with us!

Analyst’s Disclosure: I/we have a beneficial long position in the shares of OSK either through stock ownership, options, or other derivatives. 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.

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