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Commercial Vehicle Group (CVGI - Free Report) has seen a dramatic rise in price over the last week or so.  Investors are probably appreciating the fact that the stock is a now a Zacks Rank #1 (Strong Buy) with a growth style score of “A” – and that is just what you want to see for this market.

Description

CVGI makes cab related equipment for trucks and busses.  Some of the equipment they make includes seats and electrical wiring.  The company sells these products worldwide.

Recent Top Pick of the Week

Class 8 Truck Sales

Recent data has shown that the big trucks on the highway are big sellers.  I came across some interest data points that said that sales were more than 40% ahead of last year levels.

The whole trucking sector has seen a lot of news lately with an IPO in the space as well as a very larger buyout.

On top of the strength we have seen from the truckers, the transports in general are seeing a big sector rotation.  This rotation started in the shippers, but that group has seen the waters get a little choppy for investors.  Trucking has been hot as discussed above and the rail names have posted some great numbers as well.

Earnings Estimates

We are seeing the Zacks Consensus Estimate move higher of late.  The number for 2017 was sitting at $0.20 for the last two months, but it has recently kicked higher to $0.29.

The 2018 number has also seen movement that should bring a smile to the face of investors.  The Zacks Consensus Estimate for 2018 moved from $0.42 30 days ago to $0.59 about a week ago and is now at $0.61.

The increase in annual earnings estimates is the single biggest factor for why this stock is a Zacks Rank #1 (Strong Buy).

Valuation

The valuation picture is a little mixed and that could be the reason for the solid value style score.  The forward PE of 29x is pretty steep when you consider the normal market multiple is around 18x.  The other metrics are much better, with the price to book coming in a 3.8x and the price to sales multiple coming in at a very low level of 0.4x.

 

 

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