Wabash National Corporation
Thesis
Wabash National Corporation is positioned for profitability improvement as it raises prices and sees returning customers. The company is expected to expand its margins in the Commercial Truck segment and benefit from lower aluminum prices. The stock is undervalued based on future trailer order volumes, with a projected EPS of $2.50 in 2017 and a price target of $14.50.
Did it work?
The pitch was a long with a $14.50 price target premised on 2017 EPS of $2.50 and margin expansion, a horizon of roughly 1-2 years. Now more than 12 years later, the stock is down 8.4%, meaning the target was never durably achieved and a long investor lost money. While the trailer cycle did improve temporarily after the pitch, the long-run price action decisively contradicts the undervaluation claim.