Why Navistar International's Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of engine and truck maker Navistar International (NYSE: NAV  ) fell 11% today after the company idled a plant.

So what: Navistar's West Point, Mississippi plant is suspending production, and 80 workers were notified of the change today. The sequester, and a drawdown in combat in Afghanistan, has led to lower demand for defense vehicles. 

Now what: This isn't surprising given budget cuts, and Navistar has had a tough time adapting to a changing environment over the past year. The company's massive losses have put investors on edge, and even lower demand isn't good long term. This is definitely a "wait and see" stock, because I'd like to see a profit and growing revenue before jumping in, and Navistar is reporting just the opposite.

Interested in more info on Navistar International? Add it to your watchlist by clicking here.


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  • Report this Comment On June 20, 2013, at 11:25 PM, malcolmcochran wrote:

    I agree: I was long on NAV as it expanded and thought its troubles were just bad luck; until I realised no-one seemed to all that competent.

    I ran a mile (at the recent conference call) when the new COO bounded in with, "It's not perfect, but hey, etc"

    How can a company work with a guy who (must be on glue) says - and not just once - to serious investors "but hey" .

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