Robert F. Abbott has been investing his family’s accounts since 1995, and in 2010 added options, mainly covered calls and collars with long stocks. He is a freelance writer, and his projects include a website that provides information for new and intermediate-level mutual fund investors. A resident of Airdrie, Alberta, Canada, Robert has earned Bachelor of Arts and Master of Business Administration (MBA) degrees.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the co ...

Allison Transmission Holdings, Inc. (NYSE: ALSN ) has had a pullback recently from its highs in January. Given it reported its FY24 numbers recently, I wanted to take a look at its progress and touchMSc in Finance. Long-term horizon investor mostly with 5-10 year horizon. I like to keep investing simple. I believe a portfolio should consist of a mix of growth, value, and dividend-paying stocks but usually end up looking for value more than anything. I also sell options from time to time.Analyst’s Disclosure ...

Core Insights - Not all share buyback programs create equal value, as the impact of a buyback program varies significantly based on the company's size and the proportion of the buyback relative to its market capitalization [1][2] Group 1: Fiserv - Fiserv has announced a buyback authorization of 60 million shares, bringing its total buyback capacity to approximately 78 million shares [3][5] - The value of Fiserv's buyback capacity is over $18 billion, which is nearly 14% of its market capitalization of $130 billion [5] - In 2024, Fiserv spent $5.5 billion on share repurchases, a 120% increase from $2.5 billion in 2022 [6] - Fiserv's stock price has risen 103% from the end of 2022 to the beginning of 2025, indicating aggressive share repurchase despite stock price increases [7] Group 2: Analog Devices - Analog Devices has announced a new buyback program of $10 billion, increasing its total buyback capacity to approximately $11.5 billion, which is 9.8% of its market cap of over $117 billion [8] - The company also increased its dividend by 8%, resulting in a yield of nearly 1.7%, which is competitive within its sector [9][10] - Analog Devices has historically repurchased an average of $760 million worth of shares annually over the past 21 years, indicating a more selective approach to buybacks [10][11] Group 3: Allison Transmission - Allison Transmission has announced an additional $1 billion share buyback authorization, bringing its total buyback capacity to $5 billion, which is 59% of its market capitalization of $8.4 billion [12][13] - In 2024, Allison spent over $250 million on share repurchases, which is significant relative to its market cap [14] - The company reported record full-year sales of $3.2 billion and record diluted EPS of $8.31 in 2024, reflecting increases of 6% and 12% compared to 2023 [15]

Core Viewpoint - Allison Transmission has demonstrated a commitment to shareholder returns through dividend increases and share repurchases, while also positioning itself for future growth amid a challenging economic environment [1][3][19]. Financial Performance - In 2024, Allison generated an adjusted free cash flow of $658 million and repaid over $100 million of term loan debt, increasing cash and cash equivalents to $781 million from $555 million year-over-year [2]. - The company reported record revenues of $3.2 billion in 2024, with expectations for net sales in the range of $3.2-$3.3 billion for 2025, driven by strong demand in vocational vehicle markets [4]. - As of the end of 2024, long-term debt decreased to $2.39 billion from $2.49 billion in 2023 [2]. Shareholder Returns - Allison raised its first-quarter 2025 dividend by 8% to 27 cents, marking the sixth consecutive year of dividend increases, with a sustainable payout ratio of around 12% [1]. - The company authorized an additional $1 billion for share repurchases, having already bought back $250 million worth of stock in 2024, and repurchased over 63% of its outstanding shares since its IPO in 2012 [3]. Market Position and Growth Drivers - The company is well-positioned to benefit from rising global defense budgets, with sales in its Defense market increasing by 28% year-over-year to a decade-high of $212 million [5]. - Allison's focus on innovation, including fully automatic transmissions and electrification solutions, is expected to unlock new growth opportunities [6]. - International expansion efforts, particularly in Brazil and partnerships in Africa, Asia, and South America, reinforce its global growth strategy [7]. Challenges and Economic Factors - Rising R&D expenses, driven by increased spending on product initiatives, may impact short-term profitability despite supporting long-term growth [8]. - Inflationary pressures have led to higher costs for raw materials and labor, which could affect profitability if the company struggles to pass on these costs [9]. - Geopolitical risks, supply chain disruptions, and economic uncertainty pose challenges to the commercial vehicle industry, which is sensitive to economic downturns [10]. Future Estimates - The Zacks Consensus Estimate for Allison's 2025 sales and EPS indicates a year-over-year increase of 1.4% and 9%, respectively, with further growth projected for 2026 [11]. - However, EPS estimates for the first two quarters of 2025 and the full year have seen downward revisions over the past 30 days [12]. Valuation and Performance - Year-to-date, Allison shares have declined by 7%, underperforming its industry and peers [13]. - The company is currently trading at a forward sales multiple of 2.55X, which is higher than some peers but similar to others in the industry [16]. Analyst Recommendations - The average brokerage recommendation for Allison is 3 on a scale of 1 to 5, with a mix of "Hold," "Strong Buy/Buy," and "Sell/Strong Sell" ratings among analysts [20].

INDIANAPOLIS, Feb. 20, 2025 /PRNewswire/ -- Allison Transmission Holdings Inc. (NYSE: ALSN), a leading designer and manufacturer of conventional and electrified vehicle propulsion solutions and the largest global manufacturer of medium- and heavy-duty fully automatic transmissions for commercial and defense vehicles, announced today that its Board of Directors has approved an increase in the Company's quarterly dividend from $0.25 to $0.27 per share on the Company's common stock and has declared a cash divi ...

Group 1 - The primary goal of the "High Income DIY Portfolios" Marketplace service is to achieve high income with low risk and capital preservation [1] - The service provides DIY investors with essential information and portfolio/asset allocation strategies aimed at creating stable, long-term passive income with sustainable yields [1] - The portfolios are specifically designed for income investors, including retirees or those nearing retirement, and include seven different portfolios: 3 buy-and-hold, 3 rotational portfolios, and a 3-bucket NPP model portfolio [1] Group 2 - The offerings include two high-income portfolios, two dividend growth investing (DGI) portfolios, and a conservative NPP strategy portfolio characterized by low drawdowns and high growth potential [1]

Core Viewpoint - Allison Transmission Holdings (ALSN) has shown strong performance with a 32.1% increase in share price over the past six months, significantly outperforming its sector and the S&P 500 index, indicating strong fundamentals and growth prospects that make it a compelling buy [1][2]. Financial Performance - Allison achieved record net sales of $3.2 billion in 2024, with a 15% year-over-year revenue increase in its North America on-highway market, driven by demand for Class 8 vocational vehicles [5]. - The defense segment experienced a 28% year-over-year sales increase to $212 million, attributed to rising global defense spending due to geopolitical uncertainties [6]. - For 2025, net sales are expected to range from $3.2 billion to $3.3 billion, with net income anticipated between $735 million and $785 million, reflecting growth from the previous year [10][11]. Growth Initiatives - The company is expanding its product portfolio, including a $100 million annual revenue opportunity from its wide-mining dump truck initiative and the launch of its 6,000 series transmission for heavy-duty vehicles [7]. - The e-Gen Power portfolio is adapting to industry changes, with specific focus on the eGen Flex and eGen Force portfolios enhancing Allison's market prospects [8]. Shareholder Returns - Allison generated $658 million in adjusted free cash flow in 2024, allowing for over $100 million in debt reduction and more than $250 million in share repurchases, alongside a 67% increase in quarterly dividends over the past five years [9]. Earnings Estimates - The Zacks Consensus Estimate for ALSN's first-quarter 2025 EPS is $2.17, indicating a year-over-year growth of 14.21%, with the 2025 EPS estimate at $9.22, reflecting a 10.95% growth [12]. Conclusion - With robust financial performance, strategic growth initiatives, and positive earnings projections for 2025, Allison presents an attractive investment opportunity, currently holding a Zacks Rank 2 (Buy) [13].

Financial Performance - Net sales for the year ended December 31, 2024, were $3,225 million, an increase of 6% compared to $3,035 million in 2023[197]. - Net income for 2024 was $731 million, representing 23% of net sales, compared to $673 million, or 22% of net sales in 2023[196]. - Adjusted EBITDA for 2024 was $1,165 million, with an Adjusted EBITDA margin of 36.1%[190]. - Gross profit for the year ended December 31, 2024 was $1,529 million, an increase of 4% from $1,470 million in 2023, driven by $80 million in price increases and $62 million in increased net sales[200]. - Basic earnings per share attributable to common stockholders increased to $8.40 in 2024 from $7.48 in 2023[275]. - The company reported a comprehensive income of $711 million for 2024, compared to $664 million in 2023[275]. Sales and Revenue Breakdown - North America On-Highway net sales increased by $223 million, or 15%, driven by demand for Class 8 vocational and medium-duty trucks[197]. - Defense end market net sales rose by $46 million, or 28%, due to increased demand for Tracked vehicle applications[197]. - Global Off-Highway net sales decreased by $62 million, or 37%, primarily due to lower demand from the energy sector in North America[197]. - Revenue from North America On-Highway increased to $1,752 million in 2024, up 14.6% from $1,529 million in 2023[344]. - Defense revenue rose to $212 million in 2024, a 27.7% increase compared to $166 million in 2023[344]. Costs and Expenses - Cost of sales for 2024 was $1,696 million, an increase of 8% from $1,565 million in 2023, driven by higher direct material and manufacturing expenses[198]. - Selling, general and administrative expenses decreased by 6% to $337 million in 2024 from $357 million in 2023, primarily due to lower intangible amortization expenses[201]. - Engineering expenses increased by 3% to $200 million in 2024, up from $194 million in 2023, mainly due to increased spending on product initiatives[202]. - Net interest expense decreased by 17% to $89 million in 2024 from $107 million in 2023, attributed to higher interest income and lower interest expense due to a $101 million principal repayment[203]. Cash Flow and Investments - Cash flows from operating activities generated $801 million in 2024, an increase from $784 million in 2023, driven by higher gross profit and lower cash interest payments[218]. - Cash used for investing activities rose to $147 million in 2024 from $129 million in 2023, primarily due to increased capital expenditures[219]. - Cash used for financing activities increased to $427 million in 2024 from $332 million in 2023, mainly due to higher long-term debt payments[220]. - The company repurchased approximately $254 million of its common stock in 2024, with $519 million remaining available under the Repurchase Program[215]. Assets and Liabilities - Total assets as of December 31, 2024, were $5,336 million, compared to $5,025 million in 2023, marking a 6.2% increase[273]. - Total liabilities decreased to $3,685 million in 2024 from $3,792 million in 2023, a reduction of 2.8%[273]. - The balance of stockholders' equity at December 31, 2024, was $1.651 billion, up from $1.233 billion in 2023[281]. - As of December 31, 2024, the total long-term debt of the Company is $2,414 million, a decrease from $2,518 million in 2023[372]. Market and Economic Factors - A 10% increase or decrease in the Chinese Yuan Renminbi, Euro, Indian Rupee, and Japanese Yen would change the company's earnings by an estimated $5 million per year[252]. - Approximately 65% of the company's cost of sales consists of purchased components, with significant exposure to fluctuations in aluminum and steel prices[253]. - A 10% variation in aluminum prices would change earnings by approximately $8 million per year, while a similar variation in steel prices would change earnings by approximately $13 million per year[254]. Employee and Labor Relations - The UAW Local 933 ratified a new four-year collective bargaining agreement, leading to increased labor costs[177]. - Stock-based compensation increased to $26 million in 2024 from $22 million in 2023[281]. - Dividends on common stock were $1.00 per share in 2024, compared to $0.92 per share in 2023[281]. Company Overview - Allison Transmission Holdings, Inc. is the largest global manufacturer of medium- and heavy-duty fully automatic transmissions[283]. - The company operates a global distribution network with approximately 1,600 independent distributor and dealer locations[176]. - The company has been headquartered in Indianapolis, Indiana since its founding in 1915[283].

Allison Transmission Holdings (ALSN) delivered fourth-quarter 2024 earnings of $2.01 per share, which beat the Zacks Consensus Estimate of $1.93 and rose 5.2% year over year. Record quarterly revenues of $796 million grew 2.7% from the year-ago period's level and outpaced the Zacks Consensus Estimate of $791 million.See the Zacks Earnings Calendar to stay ahead of market-making news.Segmental PerformanceAllison segregates revenues in terms of end markets served, which are as follows:In the reported quarter, ...

Allison Transmission Holdings, Inc. (NYSE:ALSN) Q4 2024 Earnings Conference Call February 11, 2025 5:00 PM ET Corporate Participants Jacalyn Bolles - Executive Director, Treasury and Investor Relations David Graziosi - Chair and Chief Executive Officer Frederick Bohley - Chief Operating Officer, Chief Financial Officer and Treasurer Conference Call Participants Tami Zakaria - JP Morgan Tim Thein - Raymond James Kyle Menges - Citigroup Rob Wertheimer - Melius Research Ian Zaffino - Oppenheimer & Company Ang ...