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Nov 5, 2014

ENGINE MAKERS * USA: Paccar's

* Washington - Paccar: An excellent investment if you can stand the heat
(Photo: An Paccar MX engine) Bellevue,WASH,USA -Seeking Alpha, by Tim McAleenan Jr. -Nov. 3, 2014: -- Over the past twenty years, shares of Paccar have compounded at an annual rate over 17%... The company continues to grow revenue in the range of 10%, and replacement truck parts is a growing portion of this company's business... However, this company experiences significant profit declines and dividend cuts during economic recessions, and therefore, this company will not be attractive to everyone... For those of you unfamiliar with Paccar, it manufactures Kenworth, Peterbilt, and DAF diesel trucks. In Europe, it produces Leyland trucks. It also operates 18 factories that create replacement truck parts in Mexico, United Kingdom, Belgium, Canada, and of course, the United States (of A.). What I especially like about Paccar's business model is that it can adjust with the seasons -- the truck replacement parts have become a larger portion of the business (it now amounts to $2.5 billion-$3.0 billion out of the company's $15 billion in revenue) and the growth in the parts business is going to be nice during the next economic recession -- when companies delay the purchase of trucks and instead opt to use them for extended life, Paccar will be selling them the parts...

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