Allison Transmission Holdings, Inc. (ALSN) Being Snapped Up By Insiders

Allison Transmission Holdings, Inc. (NYSE:ALSN) has been downgraded by Stifel on March 06 which now rates the stock as Hold compared with Buy rating suggested in the past. Analysts at Mizuho, shed their positive views on January 16 by lowering it fromBuy to Neutral. The stock lost favor of Macquarie analysts who expressed their lack of confidence in it using a downgrade from Neutral to Underperform on November 29. Stifel analysts came out with bullish views on February 16 when the call was made. They think the stock is now Buy compared to to their prior call for Hold.

ALSN stock dropped -0.37% in recent trade and currently has a stock-market value of $5.82B. The shares finished at $46.16, after trading as low as $45.69 earlier in the session. It hit an intraday high Thursday at $46.42. Trading activity significantly improved as the volume at ready counter increased to 1,147,619 shares versus 1,044,265 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,061,042 shares. The stock is now 23.39% above against its bear-market low of $37.41 on March 23, 2018. It has retreated -16.46% since it’s 52-week high of $53.76 reached in October. Now the market price is up 19.71% on the year and up 5.12% YTD.

Wall Street’s most bullish Allison Transmission Holdings, Inc. (NYSE:ALSN) analysts are predicting the share price to blow past $59 per share during the next 12 months. The current median share price forecast by them is $50, suggesting that the stock could increase 8.32% in that time frame. The average price target of $49.4 calls for a nearly 7.02% increase in the stock price.

Allison Transmission Holdings, Inc. (ALSN)’s 50 day simple moving average (SMA 50) price is $47.89 and its 200-day simple moving average (SMA 200) price is $46.33. The company’s stock currently has a total float of 125.18M shares. Its weekly volatility is hovering around 1.69% and felt 2.12% volatility in price over a month. On the upside, the share price will test short term resistance at around $46.49. On a downside, the stock is likely to find some support, which begins at $45.76. The failure to get near-term support could push it to $45.36.

When looking at valuations, Allison Transmission Holdings, Inc. (ALSN) has a cheap P/E of 12.86x as compared to industry average of 28.95x. Moreover, it trades for 9.87 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 8.89x price/book and 2.14x price/sales. Compared to others, Allison Transmission Holdings, Inc. is in a different league with regards to profitability, having net margins of 23.6%. To put some perspective around this, the industry’s average net margin is 6.11%. ALSN’s ROE is 96.4%, which is also considerably better than the industry’s ROE of 9.21%. It’s also very liquid in the near term, with a current ratio of 1.7. The stock has a debt/capital of 3.83.

ALSN last reported earnings that exceeded expectations. The company raked in $1.14 per share, -93.32% change on the same period last year. That was better than consensus for $0.97. Revenue for the recent quarter stood at $647 million, up 10% on last year and above the $631.84 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $603 million to $676 million, which should be compared with $581.69 million generated last year. EPS is seen in a range of $1.02 to $1.63, against the $0.85 reported a year ago.