Bear of the Day: Commercial Vehicle Group (CVGI) - Bear of the Day

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Commercial Vehicle Group Inc. ( CVGI ) is a supplier of products and systems for the global commercial vehicle market. Its products include static and suspension seat systems, electronic wiring harness assemblies, controls and switches, cab structures and components, interior trim systems, interior and exterior finishes and mirrors and wiper systems.

In addition to manufacturing assemblies in North America, they have facilities in Europe and Asia.

Disappointing Third Quarter Results

CVGI reported its third quarter results on November 4, 2013. Revenues for the quarter were down 8.2%, compared to those for the third quarter of 2012.  Operating loss for the quarter was ($0.08) per share, significantly worse than the Zacks Consensus Estimate of $0.07 per share.

According to the management "certain of our end markets experienced a difficult quarter that negatively impacted our results".

The company has missed Zacks Consensus Estimates in all of last four quarters, with an average negative quarterly surprise of 287.4%.

Downward Revisions

Due to disappoining results, analysts have revised their estimates for the current quarter and current year downwards. Current estimates for the last quarter of 2013 stand at $0.03 per share, down from $0.12 per share 60 days ago.

Similarly estimates for 2013 and 2014 have come down to ($0.44) and $0.46 per share respectively, from $0.06 and $0.77 per share, 60 days ago.

Downward revisions have sent the stock back to Zacks Rank #5 (Strong Sell) last month.

The Bottom Line

While the company has taken a number of positive steps recently including reorganizing the leadership team and addressing the cost structure, a turnaround does not seem likely any time soon, due to challenges in end markets.

CVGI is currently Zacks Rank # 5 (Strong Sell) stock, with an Underperform recommendation. Further the Zacks Industry rank of 191(out of 265) also indicates further weakness in the short term.

Investors looking for exposure to Auto/Trucks related industries could consider Tower International (TOWR) or Federated Mugal Corp (FDML)-both are Zacks Rank #1 stocks, with longer-term 'Outperform' recommendation. 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: CVGI , FDML , TOWR

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