Allison Transmission’s Rising Earnings Drive Share Gains

ALSN makes propulsion systems for commercial and defense vehicles and is the largest manufacturer of medium- and heavy-duty fully automatic transmissions in the world. Its latest earnings report shows corporate growth and the company recently announced new partnerships focused on natural gas engine development and new mining equipment.

For the quarter that ended in June, Allison Transmission reported revenue of $816 million and per-share earnings of $2.13. The revenue figure represents a 4.2% increase over the same period a year ago while EPS delivered a 4.4% surprise to the upside relative to consensus estimates. In fact, ALSN has surpassed earnings expectations for four straight quarters.

It’s no wonder ALSN shares are up 45% this year – and they could rise more. MAPsignals data shows how Big Money investors are betting heavily on the forward picture of the stock.

Allison Transmission Shares Under Accumulation

Institutional volumes reveal plenty. Recently, ALSN has enjoyed strong investor demand, which we believe to be institutional support.

Each green bar signals unusually large volumes in ALSN shares. They reflect our proprietary inflow signal, pushing the stock higher:

Plenty of industrials names are under accumulation right now. But there’s a powerful fundamental story happening with Allison Transmission.

Allison Transmission Fundamental Analysis

Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, ALSN has had strong sales and earnings growth:

• 3-year sales growth rate (+13.4%)
• 3-year earnings growth rate (+42.2%)

Source: FactSet

Also, EPS is estimated to ramp higher this year by +15.4%.

Now it makes sense why the stock has been powering to new heights. ALSN has a track record of strong financial performance.

Marrying great fundamentals with our proprietary software has found some big winning stocks over the long term.

Allison Transmission has been a top-rated stock at MAPsignals. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

It’s made the rare Top 20 report multiple times in the last two years. The blue bars below show when ALSN was a top pick…driving value with time:

Tracking unusual volumes reveals the power of money flows.

This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.

Allison Transmission Price Prediction

The ALSN rally isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no position in ALSN at the time of publication.

If you are a Registered Investment Advisor (RIA) or are a serious investor, take your investing to the next level, learn more about the MAPsignals process here.