Author Topic: ALSN - Allison Transmission Holdings  (Read 5195 times)

walkie518

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Re: ALSN Allison Transmission Holdings
« Reply #10 on: July 12, 2018, 07:19:26 AM »
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there will be more trucks out there with ALSN transmissions since it's hard to teach double-clutch quickly to those who don't know how to drive stick, which to begin is a shrinking pool anyway. 

The competitive threat is automated-manual transmissions. They are quickly replacing manual transmissions in on-highway trucks an making inroads in other vocational applications. The driver doesn't use a clutch pedal other than to start and stop.

http://www.eaton.com/Eaton/ProductsServices/Vehicle/Transmissions/heavy-duty-automated/index.htm

https://www.truckinginfo.com/157497/automated-transmissions-yesterday-today-and-tomorrow

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Today, commercial vehicle OEMs consistently report take-rates for new long-haul/over-the-road builds solidly around the 75% mark, with Daimler Trucks North America and Volvo Trucks North America eyeballing sales north of the 80% mark. Class 8 vocational sales initially lagged behind the on-highway market segments, but have been rapidly gaining ground the past couple of years.

AMTs are not true automatics.  As noted, Eaton is the competitor in the AMT space, but one should note that Volvo makes its own AMT transmissions for its own trucks.

To my knowledge, nothing performs as well or is as fuel-efficient as the comparable ALSN product.

There's the electric-truck risk, but I think even Musk will have trouble solving that one.  We will need substantial battery improvements plus the trucks will have to be self-driving before the opportunity for ALSN disappears.  Even then, unless future mgmt is dead from the neck up, ALSN will find a way rather than shrivels up and dies.  ALSN does manufacture hybrid bus transmissions...

Another point to note, if it's not in this thread or the other one (which it might be?), are the new regulations on the number of hours truck drivers can drive and how those hours are reported (electronically).  It's likely that this will require additional drivers over what was previously perceived to be the natural rate of attrition. 

Not sure how this factors, but it's likely that the drivers get paid more than they have historically to drive less hours, and those drivers will not have to learn how to drive manual or be subject to the beating...


vince

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Re: ALSN Allison Transmission Holdings
« Reply #11 on: July 12, 2018, 11:49:20 AM »
Quote
there will be more trucks out there with ALSN transmissions since it's hard to teach double-clutch quickly to those who don't know how to drive stick, which to begin is a shrinking pool anyway. 

The competitive threat is automated-manual transmissions. They are quickly replacing manual transmissions in on-highway trucks an making inroads in other vocational applications. The driver doesn't use a clutch pedal other than to start and stop.

http://www.eaton.com/Eaton/ProductsServices/Vehicle/Transmissions/heavy-duty-automated/index.htm

https://www.truckinginfo.com/157497/automated-transmissions-yesterday-today-and-tomorrow

Quote
Today, commercial vehicle OEMs consistently report take-rates for new long-haul/over-the-road builds solidly around the 75% mark, with Daimler Trucks North America and Volvo Trucks North America eyeballing sales north of the 80% mark. Class 8 vocational sales initially lagged behind the on-highway market segments, but have been rapidly gaining ground the past couple of years.

AMTs are not true automatics.  As noted, Eaton is the competitor in the AMT space, but one should note that Volvo makes its own AMT transmissions for its own trucks.

To my knowledge, nothing performs as well or is as fuel-efficient as the comparable ALSN product.

There's the electric-truck risk, but I think even Musk will have trouble solving that one.  We will need substantial battery improvements plus the trucks will have to be self-driving before the opportunity for ALSN disappears.  Even then, unless future mgmt is dead from the neck up, ALSN will find a way rather than shrivels up and dies.  ALSN does manufacture hybrid bus transmissions...

Another point to note, if it's not in this thread or the other one (which it might be?), are the new regulations on the number of hours truck drivers can drive and how those hours are reported (electronically).  It's likely that this will require additional drivers over what was previously perceived to be the natural rate of attrition. 

Not sure how this factors, but it's likely that the drivers get paid more than they have historically to drive less hours, and those drivers will not have to learn how to drive manual or be subject to the beating...
Great post

Saluki

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Re: ALSN Allison Transmission Holdings
« Reply #12 on: July 13, 2018, 08:11:40 AM »
These threads should probably be combined.

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Does anyone understand the dynamic of why / when one would need a manual vs. automatic transmission? My basic understanding from a previous (cursory) look was that an automatic transmission is somewhat of a luxury for Class 8 vehicles given they're often driven long distances on straight, flat highways and thus don't require gears to be shifted that often. Am I wrong?

Automatic transmissions are often used in vocational applications. E.G. Trucks on construction sites. Let's say you are driving a truck with a 80,000 lbs of rock/dirt/whatever out of construction or quarry site and you are driving it up an incline. For safety reasons, you can't have any chance of rolling backwards because of driver error, plus you can get enough torque at extremely slow speeds to keep it moving with an automatic transmission.

For over the road long haul driving, automatics are rarely used. It's primarily manual-transmissions historically, but as I indicated the big 4 truck manufacturers are quickly moving to use automated manuals with production rates over 75%. Many of the largest fleets that only use newer trucks (less than 5 years old before trading) spec automated manuals for their fleets. It's easier on drivers.

Here's video comparing Allison Transmission vs a couple of competitors transmissions on a big truck and 25% incline.

https://www.youtube.com/watch?v=3rvTq0eXwdU

It's pretty scary to see that truck rolling backward if you are in the driver seat.  I don't know the engineering, but it looks pretty impressive vs the competition.
If it's important, do it every day. If it's not important, don't do it at all.  -Dan Gable

walkie518

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Re: ALSN - Allison Transmission Holdings
« Reply #13 on: July 31, 2018, 08:59:37 AM »
great earnings!


walkie518

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Re: ALSN - Allison Transmission Holdings
« Reply #14 on: September 25, 2018, 02:35:56 PM »
any reason to think this is still fairly cheap here?  mcap/fcf could be around 10x?

Saluki

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Re: ALSN - Allison Transmission Holdings
« Reply #15 on: September 25, 2018, 07:27:39 PM »
any reason to think this is still fairly cheap here?  mcap/fcf could be around 10x?

EV/Ebit is below 10, so it still looks okay, but not ridiculously cheap. I own a small amount of it , about 1% of my portfolio (I started builiding a position, but it started climbing as soon as I bought it and I waited for it to come down, but it's up about 30% in the past couple of months.  I didn't want to pay 5% more, so the jokes on me now). 

At this point I'll just sit on it until Jan 1 so I don't have to pay taxes on it if I sell.  If it dipped I would buy more but a couple of other things I like (TPHS and SSW) have come down in the past few weeks so I'm nibbling on those in the meantime. 
If it's important, do it every day. If it's not important, don't do it at all.  -Dan Gable

vince

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Re: ALSN - Allison Transmission Holdings
« Reply #16 on: September 26, 2018, 06:12:47 AM »
any reason to think this is still fairly cheap here?  mcap/fcf could be around 10x?

Still cheap here cause even if the multiple doesnt grow you are highly likely to get a satisfactory return.  Starting with a 10 percent yield I believe current fcf is at least representative of current earning power and very likely to grow at modest rates.....10 percent yield plus the growth rate, assuming a constant multiple is a very good return indeed and provides a nice margin of safety against rising interest rates.