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Markets - USA - The 2006 Diesel Truck Prebuy Is Over. Now What?
Enticing investment opportunities could be waiting at the bottom of the hill
Chicago,IL,USA -The Morning Star, by Ben Butwin -1 Sept 2006: -- Now before you get nauseous, switch gears and imagine you're a heavy-duty truck and engine manufacturer. You're anxiously awaiting Jan. 1, 2007, and the new U.S. diesel engine emissions laws that have already led your firm to the top of its own metaphoric hill. Over recent months, your North American customers have expedited their purchasing to avoid exposure to the more-expensive and less-productive 2007 engines. Your revenues and profits have ramped up to record levels, and all of your production slots have been filled for the remainder of the year. You can do nothing now but wait for the inevitable freefall in orders that will perpetuate through the next 12-18 months... See the parallel? Investors looking for long-term winners need not be scared away by demand bubbles that create this type of transitory volatility. Instead, we think that attractive buying opportunities might present themselves when the market reacts, and possibly overreacts, to the unavoidable short-term earnings plummet that is sure to come in the truck manufacturing arena...
posted by Unknown @ 12:58 PM
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