Well, it looks like investors ignored my advice to refrain from "shorting" Navistar (NYSE:NAV) last month. ("Doc, my ego hurts when I write like this." ... "So don't write like that.")

Since “Navistar's Falling Star“ ran, the stock has borne more of a resemblance to the title of that column than to its ultimate conclusion (that this stock isn't nearly as expensive as it looks). It's already plummeted about 12% against a flat S&P 500 -- but let me go out on a limb again and explain why I still see a bright future for Navistar.

Unveil the crystal ball
Navistar updated investors on its near-term prospects Tuesday, reaffirming its expectation of $15 billion or more in annual sales for this year, and as much as $1 billion in operating profit from its manufacturing business. Net profit won't quite match that sum -- Navistar gave new guidance that per-share profits will probably range between $4.26 and $5.72 this year.

Assuming all works out as planned, that will give the company about a 6.7% operating margin and a 2.4% net. Which sounds kinda weak, I admit. But consider -- that operating margin in particular is several times as strong as Navistar's trailing-12-month performance, and well on the way toward the 10% operating margin that Navistar predicted it would attain next year.

Personally, I see no reason why a historic name like Navistar should be unable to earn 10% margins on its products. Rival and Motley Fool Stock Advisor recommendation Paccar (NASDAQ:PCAR) earns 10%, and close competitors like Deere (NYSE:DE) and Caterpillar (NYSE:CAT) routinely do even better.

Plus, its business model is tied more to the needs of companies requiring large trucks to move goods than to the needs of consumers who could just as easily get by with a Prius. This means Navistar should be able to sidestep the miserly margins with which Ford (NYSE:F) and GM (NYSE:GM) must content themselves.

So should we buy it?
You should at least consider it. Navistar currently sells for less than 12 times the midpoint of its earnings guidance for this year. Paccar, operating at the level of profitability that Navistar expects to attain, sells for 13 times -- and if you believe the analysts, Navistar is likely to outgrow Paccar by more than a factor of two over the next five years. The time to buy the stock is before that growth happens.

What was Navistar doing before it became “stock-ata non grata” on the NYSE? Find out in:

Fool contributor Rich Smith does not own shares of any company named above. Paccar is a Motley Fool Stock Advisor pick. Why do we tell you this? Because The Motley Fool has a disclosure policy.