Likely Time to Warm up to a Few Key Commercial Truck Players

Charts below plot NAV and SRI on a weekly basis.

Both companies play in the commercial truck space – NAV a truck OEM and SRI a supplier to truck OEMs.

As a junior analyst on the sell-side, I was responsible for coverage of SRI, which my senior analyst had on his list – it’s a small cap company and he didn’t want to be bothered.

The management team of SRI is absolutely credible, especially the CFO, who used to be the CFO of BWA and for a spell, Visteon, both major players in the auto industry.

Regardless, both are at (SRI) or nearing (NAV) material long-term support zones/lines and have been decimated recently.

These are deeply cyclical, industrial names – they fluctuate wildly.

People love them at the top of the cycle before 75% declines and hate them at the bottom of the cycle before doubles and triples to the upside.

Given the support at hand, I believe they are close to the latter, with the potential for material upside for both in a compressed period of time.

I would begin inching into SRI now given support (keeping 10%-15% stop in place) and doing the same for NAV once it hits the ~$17 zone.

2012-09-26 NAV & SRI - Weekly