Paccar Is A Bit Overpriced For This Fundamentally Sound Company

Hong Chew Eu
1.22K Followers

Summary

  • PACCAR is fundamentally sound, with improving returns driven by topline growth and operational efficiencies. It achieved double-digit profit growth despite being in a mature market.
  • Financially robust, PCAR generates strong cash flows, has a solid capital allocation plan, and maintains a significant cash reserve.
  • There is only a 25% margin of safety despite optimistic assumptions, suggesting patience for a better entry point.

White trucks driving on the highway winding through forested landscape in autumn colors at sunset

Milos-Muller

Investment Thesis

PACCAR (NASDAQ:PCAR) is fundamentally sound. Over the past 12 years, it has delivered improving returns, driven by both topline growth and improving operating and capital efficiencies.

The company is also financially sound, and there are signs that improvements

This article was written by

1.22K Followers
BSc (Eng), MBA. Self-taught value investor with 2 decades of investing experience. Blogger at i4value.asia. The blog is on value investing through case studies where I analyze and value listed companies in the ASEAN and US regions. I have an exceptional perspective having served as a Board member of a Malaysia listed company for several decades. I have value investing book "Do you really want to master value investing?" on Amazon

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within 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.

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