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5 Reasons Paccar Inc. Stock Is a Strong Buy Now

By Neha Chamaria - Mar 1, 2016 at 8:40AM

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Why Paccar is looking attractive at current prices.

Paccar owns three popular brands: Kenworth, Peterbilt, and DAF. Image source: Company website.

Paccar (PCAR 3.22%) has defied the decline in broader markets so far this year, having gained nearly 9% year to date. However, if you look at the past year's performance, Paccar is still down about 20% from last year's highs; and it's only now that the stock appears to have reversed its downtrend.

There are valid reasons why the stock is holding up, one being the strong results that Paccar recently reported for 2015. In fact, some key performance metrics that the truck maker highlighted in its earnings report may have even gone unnoticed, but could play a big role in its growth going forward. For instance, Paccar currently sources the majority of the engines for its trucks from Cummins (CMI 4.91%). But the company is becoming increasingly self-reliant by manufacturing its own engines, so much so that it expects to installits MX engines in 50% of its Kenworth and Peterbilt trucks within the next couple of years. While that'll be a setback for Cummins, it's a huge win for Paccar.

But such growth initiatives are just one of the reasons why Paccar looks so compelling now. In the slideshow below, I've highlighted five reasons why you should consider the stock at current prices.


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Stocks Mentioned

PACCAR Inc Stock Quote
PACCAR Inc
PCAR
$84.21 (3.22%) $2.63
Cummins Inc. Stock Quote
Cummins Inc.
CMI
$195.02 (4.91%) $9.13

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