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PreMarket Prep Stock Of The Day: Oshkosh Corp.

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PreMarket Prep Stock Of The Day: Oshkosh Corp.

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

When major contract announcements are forthcoming, it pays to do some homework.  In the case of the USPS contract for new delivery vehicles, finding out that Oshkosh Corp (NYSE: OSK) was in contention could have paid off handsomely, making Oshkosh Wednesday's PreMarket Prep Stock Of The Day.

See also: How to Buy Stocks

What Oshkosh Does: Oshkosh is a leading maker of access equipment, specialty vehicles and military trucks. It serves diverse end markets, where it is typically the market share leader in North America, or, in the case of JLG aerial work platforms, a global leader.

After winning the contract to make the Humvee replacement, the Joint Light Tactical Vehicle, in 2015, Oshkosh became the largest supplier of light defense trucks to the U.S. military.

The company reports four segments: access equipment (49% of revenue), defense (24%), fire and emergency (15%) and commercial (12%). It generated $8.4 billion in revenue in 2019.

The Other USPS Contenders: Workhouse Group (NASDAQ: WKHS) is a small truck builder that originally teamed up with truck body maker VT Hackney. Yet Hackney abandoned the project, leaving the novice Workhorse to continue on its own. 

Workhorse purchased the intellectual property for $7 million related to the truck and acquired the right to bid for the contract to be built in its factory in Indiana. 

Perhaps the company’s most valuable asset is its 10% of Lordstown Motor Corp., an electric pickup truck startup in Lordstown, Ohio. The was speculation that Lordstown would assist in the manufacturing if Workhorse landed a large contract for the new mail trucks.

The other contender is Turkey-based Karsan, which makes commercial electric vehicles, The company partnered with long-time USPS supplier Morgan Olson of Sturgis, Michigan. The team proposed a a plug-in hybrid engine option for the new mail truck to be built in the U.S. 

The USPS Decision: Just after 3 p.m. on Tuesday, the USPS awarded Oshkosh with the contract for the next-gen delivery vehicles. In hindsight, the USPS chose a well-established truck builder that was based in the United States as opposed to a new company or a company that was not domiciled in the U.S.

As expected, the one-trick pony Workhouse Group went into freefall, losing almost half ot its value from Monday, swooning from $31.34 to $16,47.

The move lower has continued in Wednesday's session, and Workhorse shares were down 9.87% at $14.84 at last check. 

On the other hand, Oshkosh leaped from $103.28 to $109.62 on Tuesday.  It has tacked on much more in Wednesday’s session and was trading 6.5% higher at $116.74 at last check after earlier making a new all-time high at $120.75.

 

 

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