Paccar: An Emissions/Emerging Markets Play

Further, Paccar should receive an added tailwind during the current economic expansion from more-strict environmental regulations: those more-rigorous emission standards will encourage companies to replace at least some trucks ahead of schedule. The First Call FY2009/FY2010 EPS estimates for PCAR are 23 cents to 91 cents.

Technically, Paccar's stock chart looks is strong -- an uptrend, with only minor, corrective pull-backs, and a stock price that's almost always above the key, 50-day moving average -- the latter of which indicates institutional investors (IIs) are adding to/establishing PCAR positions. True, Paccar did fall below the 50-day MA to close out 2009, but most of that was year-end profit-taking by short-term IIs: PCAR traded below $21 earlier in the 2009 before rising to $40. Hence, view the pull-back as a Buy opportunity.

2010 Outlook: Paccar is a long-term play, but if you're looking to sell PCAR within the year, take your profits after it rises to $44.

Stock Analysis: Paccar Inc. is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in PCAR now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your PCAR position before March 2010. Sell/stop loss if you were to buy shares in this company: $17.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.