PACCAR (PCAR) Analysis Updated
We analyzed PCAR balance sheets in a blog before.
PCAR is expected to release its quarterly earnings on Tuesday. Let us consider if PCAR is a good buy at this time or not.
PCAR is already part of the SP500 index - so you likely already own it if you own any of the SP500 index funds such as IVV, SPY or VFINIX. So the question really is do you want to own the stock outside of the index funds and if this is a good time to add to PACCAR position.
As the business week article ( http://yahoo.businessweek.com/magazine/content/06_05/b3969059.htm ) mentioned, PCAR is built for the long haul. So even if the truck sales go down the coming year, if the ownership horizon is the five-ten year range it is a good buy. The stock is likely go down in the first half or the second half of 2007 as the transition to cleaner burning diesel takes place. The primary reason for the fall is going to be the reduction in special dividends and the higher P/E. Although the lower P/E is already reflected in the stock to a certain extent, don't expect a significant runup in the next two years.
The global business cycle upturn should last through 2009-2010. So, the stock should be more attractive in the coming year.