Accuride Corp (ACW)

Accuride Corporation (NYSE: ACW) is a manufacturer and supplier of commercial vehicle components serving original equipment manufacturers such as Freightliner Corporation, PACCAR, Inc., (Peterbilt and Kenworth brands), International Truck and Engine Corporation (International brand), and Volvo Truck Corporation (Volvo and Mack brands).

The stock had a recent close of $15.31 which is what go my attention because I had it on my watch list with a 3-5 year from now reasonable value estimate of $31-$33.

At the moment, the markets seem to be just starting to realize that analysts are expecting earnings growth over the next twelve months of 18%, which is what I believe has started the current upward price trend.

My buy target for this stock is $15.50 and my sell target is $33. I would start a position in the $15.50 to $16.00 range and add to that position on the dips. I would start closing my position at $31 by selling half of my shares and be completely out of the stock at $33.

While one of the good things about earnings growth can be an increase in price, it is also one of the big downsides.

Should the company fail to grow earnings as forecast by the analysts, the stock price will be reduced to rubble over the short term.

But with a 3 year average free cash flow of $2.23 and a trailing twelve month PE of 7.34, I think over the longer term the stock will be just fine.

I currently do not own any shares of ACW.