Navistar Out Of The Woods, But A Struggling Macro Environment Isn't Helping

Navistar has meandered through a tough period that would have driven many lesser companies into bankruptcy. The company, however, remains the highest beta and is the most heavily levered stock in Potter's coverage. Brexit related risks are low, but declining order in the U.S. truck market will "probably lead investors to look for 'safer' options," Potter noted.

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The company has made an impressive turnaround. Navistar has fought to regain market share, fix its balance sheet and is determined to implement reforms. The determination paid off when it reported its first profitable quarter since 2012 in spite of a disappointing U.S. truck market. But, with the continued deterioration of the U.S. market, the margin of error is "razor thin," Potter stated.

At time of writing, Navistar was down 2.12 percent on the day, trading at $10.64.