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What's your current thinking on Oshkosh? It's down over 17% since you purchased it and I'm wondering if I should jump in at what's probably a super-low price or if you regard it as a value trap at this point.

Hi Bikerliz,

While I cannot tell you what to do, I can tell you what I'm going to do.

I looked more into this company, caught up on the fiscal Q2 earnings release and then put together a chart similar to what I had done for Textron. (I really should have done this earlier.) Similar to this one: http://www.fool.com/investing/general/2011/04/11/rising-star...

I've also uploaded the spreadsheet that contains the Oshkosh data to Google Docs, and you can view it (or download it from) here: https://docs.google.com/leaf?id=0Bx9lpnazQGRSNmZlZDMxYmEtNTh...

Unlike Textron, which has been in a similar situation with divisions seeing declining revenue but has since seen a turnaround start to happen (and the Q1-2011 lines extend the red, blue, and purple lines in the Textron image in the above link), Oshkosh appears to still on the downward slope for its four divisions. If you view that file on Google's site, the labels on the graphs don't come through, but the lines are:

Blue: defense (revenue climbs steadily over time, until recently)
Pink: access equipment
Yellow: fire & emergency (flat operating income)
Cyan: commercial (dips below zero for operating income)

As you can see there, Defense, which is driving the lion's share of revenue and operating income, is in a major decline, while Access Equipment has not turned yet, and the other two are either flat or declining slightly.

In other words, I probably should have waited before buying originally and it's going to take a while (management is saying second half of the year, which ends in Sept.), but we'll just have to see.

Right now, I'm not going to sell because I believe the company will turn around. However, I'm not going to buy more until I see that the majority of the trends are bottoming out or turning upward.

While one might also say I was early on Textron (currently down 5.3% and 12.8% on the two purchases), the data shows that the revenue turnaround there is well under way and net income and higher share prices should follow. With Oshkosh, I don't think the company is there yet, but it should get there over the next few quarters.

Cheers,
Jim
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