Oshkosh: "Best of Breed"

12/14/2016 8:00 am EST


Stephen Leeb

Founder and Research Chairman, Leeb Group

With leading U.S. market positions in a diverse assortment of areas levered to infrastructure and defense, this recommendation is one of the surest beneficiaries of Trump’s likely policies, asserts Stephen Leeb, growth stock expert and editor of The Complete Investor.

Oshkosh (OSK) is a leader in making light, medium, and heavy defense trucks vital to military operations, ranging from utility trucks to close-combat weapons carriers to heavy gun carriers.

With their best-of-breed technology, Oshkosh vehicles, sold both to U.S. and to friendly foreign militaries, give fighters a reliable edge.

Oshkosh also is the world leader in access equipment, which is critical ancillary equipment used in such infrastructure projects as bridge building and repair.

It’s also used in refurbishing buildings and in new construction, making it a natural beneficiary of urbanization trends in the Eastern part of the globe.

International sales of Oshkosh’s military trucks and access equipment have been growing by nearly 20 percent a year, and by next year international sales should account for 30 percent of companywide revenues—a big leap up from 10 percent in 2010.

The company, which is also a U.S. leader in firefighting apparatus, waste collection vehicles, and concrete mixers, clearly has a cyclical flavor, but its tight cost controls have let it navigate even the worst recessions without a loss.

The company’s growing presence in rapidly expanding international markets should both cut cyclicality and add percentage points to growth.

Profits should easily top $7 a share by the end of the decade. A three-to-five-year target is the low triple digits.

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