How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Allison Transmission (ALSN) ten years ago? It may not have been easy to hold on to ALSN for all that time, but if you did, how much would your investment be worth today?
With that in mind, let's take a look at Allison Transmission's main business drivers.
Headquartered in Indianapolis, IN, Allison Transmission Holdings, Inc. is a manufacturer of fully-automatic transmissions for medium and heavy-duty commercial and heavy-tactical U.S. defense vehicles. In fact, the company is the largest producer of fully-automatic transmissions, holding the leading position in several niche markets. The firm also offers electric hybrid and fully electric propulsion systems.
The company segregates revenues by end markets. In North America, it serves On-Highway (contributed 50.4% in 2023) and Off-Highway (2%) end markets. Likewise, Outside North America, it serves On-Highway (15.7%) and Off-Highway (3.4%) end markets. Besides on and off-highway, it also serves Defense (5.5%), and Service Parts, Support Equipment and Other (23%) end markets.
Within the On-Highway market, it serves fully-automatic transmissions in North America, majorly catering to Class 4-5, Class 6-7 and Class 8 straight trucks, conventional transit, shuttle and coach buses, school buses and motorhomes. Outside North America, Europe, the Middle East, Africa (EMEA) is the company’s largest market.
In the Off-highway market, the company offers products used in vehicles and equipment that serve energy, mining and construction applications in North America and overseas. Outside North America, Asia-Pacific and EMEA constitute the firm’s key markets.
Allison’s Defense end market helps in providing a hedge against economic cycles and disruptions. It supplies transmissions for medium- and heavy-tactical-wheeled vehicle platforms, including the Joint Light Tactical Vehicle, Light Armored Vehicle, Stryker Armored Vehicle, Mine Resistant Ambush Protected Vehicle, Heavy Dump Truck, Heavy Equipment Transporters, et al.
The company’s Service Parts, Support Equipment and Other end market comprises Allison-branded service parts and transmission fluids, aluminium die cast components, extended transmission coverage, royalties, saleable engineering and support equipment.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Allison Transmission a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in February 2015 would be worth $3,752.87, or a gain of 275.29%, as of February 3, 2025, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 202.78% and gold's return of 113.60% over the same time frame.
Going forward, analysts are expecting more upside for ALSN.
Allison is experiencing robust demand in the North America On-Highway market, driven by strong Class 8 vocational vehicle sales, which fueled revenue growth in 2023. The company anticipates further growth in 2024 and is targeting an additional $100 million in revenues from rising global defense budgets. Allison’s emphasis on advanced technology and innovative product development strengthens its competitive edge. International prospects remain promising, supported by strategic market expansions and partnerships. Notably, Allison entered Brazil's ag sprayer market in first-quarter 2024, capitalizing on South America's largest agricultural economy and bolstering its Off-Highway business. The firm’s investor-friendly moves also instill confidence. Thus, we are bullish on the stock for the time being.
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