Hedgeye CEO Keith McCullough is adding Volvo (VLVLY) to the long side of Investing Ideas. Below is a brief note.
There's not only a buying opportunity here in US Industrials (XLI) and names like ROK, but there's a big one in a new European Industrial idea we had in Volvo (VLVLY)...
Here's a great summary excerpt from Jay Van Sciver's Industrials Pro independent research product on the name:
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Shares of Volvo Group have lagged other machinery-oriented names despite favorable industry and company specific factors. We expect the spin-off of Daimler Truck and, to a lesser extent, the acquisition of NAV by TRATON, to reduce the competitive intensity among Truck OEMs. While we also have a positive view on shares of PACCAR, Volvo also offers greater exposure to more favorable European macroeconomic drivers. Trucking conditions in Volvo’s key markets remain extremely tight, while labor conditions may ease in coming months. Construction equipment demand in developed markets should remain reasonably robust, a view supported by fleet demographics, COVID recovery stimulus, elevated commodity prices, and aging infrastructure. We see greater than 50% relative upside for shares of Volvo as robust demand intersects with stronger 2022 pricing. |
You don't chase. You buy things on sale,
KM
