Maverick Capital Decreases Position in Allison Transmission


Dec. 4 2020, Updated 10:43 a.m. ET

Maverick Capital and Allison Transmission

During 4Q14, Maverick Capital decreased its position in Allison Transmission (ALSN) by over $82 million. The stock accounts for 1.95% of the fund’s total 4Q14 portfolio.

Article continues below advertisement

Allison Transmission’s 4Q14 results beat ranges

In 4Q14, net sales grew 11% to $544 million. The company’s earnings release notes that “The increase in net sales was principally driven by the continued recoveries in the North America On-Highway and Off-Highway end markets, and higher demand in the Service Parts, Support Equipment & Other end market, partially offset by lower demand in the Outside North America On-Highway and North America Hybrid-Propulsion Systems for Transit Bus end markets.

Adjusted net income was $117 million compared to $78 million in 4Q13. Adjusted free cash flow was $129 million or $0.71 per diluted share. In 4Q13, adjusted free cash flow was $109 million or $0.59 per diluted share.

In the full-year 2014, net sales were $2.13 billion compared to $1.93 billion the previous year. Adjusted net income was $479 million. Adjusted free cash flow was $524 million or $2.87 per diluted share.

Returns to shareholders

The company’s board of directors authorized a stock repurchase program of $500 million. The company also increased its quarterly dividend from $0.12 to $0.15 per share. On February 19, the company declared a quarterly dividend of $0.15 per share.

Article continues below advertisement

Cautious 2015 outlook

The company sees uncertainty in the global off-highway end markets in the future. In the full-year 2015, the company expects net sales to be down by 0% to 5%. Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) are expected to be between 34% and 35.5%. Adjusted free cash flow is to be in the range of $475 million to $525 million or $2.60 to $2.90 per diluted share.

Investors can gain exposure to ALSN by investing in the iShares Russell 1000 Growth ETF (IWF). ALSN accounts for 0.039% of IWF.

Overview of Allison Transmission

Allison Transmission and its subsidiaries design and manufacture commercial and defense fully automatic transmissions. The company has 13 transmission product lines. Allison transmissions are used in a wide variety of applications, including on-highway trucks, buses, motorhomes, off-highway vehicles, and equipment such as energy, mining, construction, and defense vehicles. According to Allison’s filings, it sold ~63% of fully automatic transmissions for medium- and heavy-duty on-highway commercial vehicle applications.

The company serves customers worldwide through an extensive network of 1,400 distributors and dealers. But North America represented 80% of the company’s total revenue in 2014. Some of its end users include Coca-Cola (KO), Waste Management (WM), British Airport Authority, and Navistar International (NAV).

In the next part of this series, we’ll cover Maverick’s position change in Community Health Systems.


Latest Navistar International Corp News and Updates

    Market Realist Logo

    © Copyright 2022 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.