Oshkosh Corp.: Pull-Back Is Buy Opportunity

Meanwhile, two other business lines will likely face a more-challenging 2010: fire and emergency vehicle revenue (including fire fighting trucks), should be flat, while commercial truck revenue will likely decline 7-10%. Still, neither data point is enough to blot-out the positive story stemming from OSK's defense-related work. The First Call FY2010/FY2011 EPS estimates for OSK are $4.17 to $2.99. That $2.99 FY2011 EPS estimate will likely prove to be low.

Technically, Oshkosh's stock chart is strong -- an uptrend. True, Oshkosh's stock did fall below the key, 50-day moving average to close out 2009 after bursting through psychological resistance at $40, but most of that was year-end profit-taking by short-term institutional investors: OSK traded below $10 earlier in 2009. Hence, view the recent pull-back as a Buy opportunity.

2010 Outlook: Oshkosh is a long-term play, but if you're looking to sell STD within the year, take your profits after it rises to $47.

Stock Analysis: Oshkosh Corp. is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in OSK now; then buy another 25% in one month. Under any circumstance, don't buy more than 75% of your OSK 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.