Navistar A Neutral Stock Until SEC Probe, Change In Fines Resolved
Navistar A Neutral Stock Until SEC Probe, Change In Fines Resolved.
- (1888PressRelease) August 13, 2012 - Navistar (NAV) is experiencing an eventful August, with the stock displaying volatility in the first week of the month. The stock plummeted 14% after the company slashed its future outlook amidst a weak U.S. truck market forecast, disclosed its ongoing inquiry with the SEC, and announced its future partnership with Cummins (CMI) to obtain urea-based engines after the company's CEO, Ustian, decided to give up his disastrous EGR engine strategy.
However, lately, the stock has regained most of the loss after it offered to buyout nearly 30% of its workforce. Also, the company has received an approval from the EPA to continue selling its heavy-duty diesel engines, as long as it pays the fines on those engines. However, a final ruling on the change in the amount of fines has not yet been given. Moreover, according to Ward's automotive report on Class 8 engines market share data, NAV's share of factory shipments (that do not include retail sales) rose by 260 bps to 13.9% in June.
Amidst all these events, NAV has continuously faced pressure from activist holdings as Mark Rachesky's MHR recently increased its share in NAV to 14.99%, just shy of the 15% level that earlier triggered the poison pill defense from NAV's management. Currently, Franklin Resources (BEN), Carl Icahn and MHR hold a total of about 45 percent stakes in the company.
NAV was reported to have the highest increase in a market share in the engine market in June. The improvement of 260 bps (from 11.3% to 13.9%) was far greater than the 60 bps (from 39.4% to 40%) improvement for CMI. Paccar Inc (PCAR), on the other hand, faced a declining market share (from 5.1% to 4.7%) as it is relatively new to the engine business. Currently, CMI holds the largest chunk of the market share.
Source URL: http://seekingalpha.com/article/792881-navistar-a-neutral-stock-until-sec-probe-change-in-fines-resolved
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