WNC - Wabash National: Statistical Discount At 5.5x Earnings 50% Return On Equity
2024-02-02 21:53:07 ET
Summary
- The industrials sector might be one area to consider with top-down asset allocation in 2024.
- Wabash National Corporation is a high-quality company with attractive economics and strong fundamentals.
- WNC has shown consistent growth in earnings and free cash flow, presenting a bullish outlook for the next 3-5 years.
Investment Briefing
The industrials sector offers a compelling risk reward calculus for top-down asset allocation in 2024 in our opinion. This has been a critical theme to positioning in Q1, guiding individual security selection as part of the risk budget. Investors reading this channel regularly would have noticed the tilt towards industrials/materials in our thematic research on the back of this thesis.
By the end of Q3 '23, the industrials sector held just 8% notional value of the market weighted S&P 500 index, but was projected to contribute 16% of the next 12 months projected earnings growth. Regular readers of mine will have noted the data in Figure 1, which highlights this notion. Critically, industrials only contributed 90bps of the index's Q3 '23 earnings growth, which adds to the attractiveness of the forecasts at the time in our view....
Wabash National: Statistical Discount At 5.5x Earnings, 50% Return On Equity