TRATON SE (XTER:8TRA, Financial) (less than 1.0%) (8TRA – XE – €14.13/$15.13) – headquartered in Munich, Germany – is a leading global manufacturer of commercial vehicles with a product portfolio that spans light, medium, and heavy duty trucks as well as buses sold under wholly owned brands Scania, MAN, Navistar, and Volkswagen Truck and Bus. TRATON spun out of parent company Volkswagen (which maintains 90% ownership) in 2019. Management’s focus remains on improving longer term profitability – driven by a restructuring at the MAN segment – as well as cost synergies achieved through the gradual rollout of TRATON’s Common Base Engine (CBE) across all divisions incorporating a greater number of common parts and components. The company is also well positioned to gain future market share in North America through its most recently acquired (2021) segment Navistar. The combination of improved profitability, share gains, and a deleveraging balance sheet will likely drive both earnings growth as well as valuation multiple expansion as TRATON trades at a meaningful discount to its best in class peers.
From Mario Gabelli (Trades, Portfolio)'s Gabelli Asset Fund fourth-quarter 2022 commentary.
