Summary
- Allison Transmission (ALSN) shows strong technical indicators, including 100% buy signals, a 65.38% gain in the last year, and a Trend Seeker buy signal.
- The company designs and sells automatic transmissions and electric propulsion systems for commercial and defense vehicles, with a robust market presence and diverse product range.
- Fundamental factors include a market cap of $8.70 billion, a P/E of 12.86, and projected earnings growth of 13.19% annually over the next five years.
- Analysts' opinions are mixed with 2 strong buys, 1 buy, 5 holds, and 2 sells, while Value Line and MorningStar provide cautious long-term outlooks.
The Chart of the Day belongs to the automotive parts company Allison Transmission (ALSN). I found the stock by using Barchart's powerful screening functions to find stocks with the highest technical buy signals, highest Weighted Alpha, superior current momentum and having a Trend Seeker buy signal then used the Flipchart feature to review the charts for consistent price appreciation. Since the Trend Seeker signaled a buy on 9/19 the stock gained 7.79%.
Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles, and electrified propulsion systems worldwide. It provides commercial-duty on-highway, off-highway and defense fully automatic transmissions, and electric hybrid and fully electric systems. The company offers transmissions for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school and transit buses; motor homes; energy, mining, and construction off-highway vehicles and equipment; and wheeled and tracked defense vehicles. It provides its transmissions and electric propulsion solutions under the Allison Transmission brand name; and remanufactured transmissions under the ReTran brand name. The company also sells branded replacement parts, support equipment, aluminum die cast components, and other products necessary to service the installed base of vehicles utilizing its solutions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. It serves customers through an independent network of approximately 1,600 independent distributor and dealer locations. The company was formerly known as Clutch Holdings, Inc. Allison Transmission Holdings, Inc. was founded in 1915 and is headquartered in Indianapolis, Indiana.
Barchart's Opinion Trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 20 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report.
Barchart Technical Indicators:
- 100% technical buy signals
- 73.29+ Weighted Alpha
- 65.38% gain in the last year
- Trend Seeker buy signal
- Above its 20, 50 and 100 day moving averages
- 18 new highs and up 13.76% in the last month
- Relative Strength Index 70.62%
- Technical support level at $98.26
- Recently traded at $98.04 with 50 day moving average of $89.42
Fundamental Factors:
- Market Cap $8.70 billion
- P/E 12.86
- Dividend yield .99%
- Revenue expected to grow 3.80%this year and another 4.70% next year
- Earnings are estimated to increase 5.50% this year, an additional 14.20% next year and continue to compound at an annual rate of 13.19% for the next 5 years
Analysts and Investor Sentiment -- I don't buy stocks because everyone else is buying but I do realize that if major firms and investors are dumping a stock it's hard to make money swimming against the tide:
- Wall Street analyst gave 2 strong buy, 1 buy, 5 hold and 2 sell opinions on the stock
- Analysts' price targets are between $67 and $128
- Value Line rates the stock its above average rating of 2 and comments: "The profit picture should get rosier with time. That said, timely shares of Allison Transmission have below-average long-term capital appreciation potential, at the current quotation."
- CFRAs MarketScope rates the stock a strong buy
- MorningStar give the stock its below average rating of 2 with a fair value of $87 or 14% over valued but comments:" We believe Allison will continue to be the top supplier of fully automatic truck transmissions, despite increasing regulation of emissions by government authorities. The company dominates the medium-duty market, commanding approximately 80% share in some verticals (school buses, Class 6-7 trucks, and Class 8 straight trucks). "
- 6,220 investors monitor the stock on Seeking Alpha
Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance and reevaluate your stop losses at least on a weekly basis.
On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
