Tickers in this Article: CMI, CAT, NAV, PCAR, MGA, VOLVY, VLKAY
Judging by the comments from one of Europe's largest truck-makers, the recovery in the market for big rigs still has a ways to go. Along with its earnings release on Monday, Germany's MAN SE (Nasdaq:MAGOY.PK) expressed a fair bit of confidence in the growth outlook for the truck market in 2011. While investors who showed up early to play the commercial truck revival have already done well, this latest news gives at least some hope that the rally is not running on empty just yet.

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Strength in Europe, Strength in Emerging Markets
Not only did MAN report a 22% jump in revenue from last year, but the company reversed a year-ago loss in profits of over $1 billion. Looking specifically at the commercial truck segment, revenue jumped 36% on a unit increase of nearly 53%. Encouragingly, orders in the truck business were up 68% and the company talked about strength in both the European market and developing markets like Brazil. (For more, see The Upside Of Trucking.)

If Europe is indeed strong, that is good news not only for MAN, but major players like
Volvo (Nasdaq:VOLVY.PK) and Scania as well, to say nothing of larger vehicle companies like Volkswagen (Nasdaq:VLKAY.PK), Daimler and Fiat Industrial that all have business (or investment stakes) in the commercial truck sector.

Good News for Americans As Well?
It is all well and good if the European truck market is doing well, but the fact remains that many investors do not care about a bunch of stock tickers that end in "Y". The good news, though, is that the U.S. market is showing strength as well and the commercial truck market is more global than many investors may realize.

Cummins (NYSE:CMI), for instance, is a major player in heavy-duty engines and gets a very large percentage of its revenue from overseas. Strength in Europe and emerging markets like China and Brazil, then, is good news for a company whose stock had been red-hot before this broader market weakness began in mid-February. Along very similar lines, Caterpillar (NYSE:CAT) is a major manufacturer of heavy-duty engines (both on-road and off-road) with significant share both inside and outside the U.S.

Such is also the case for truck makers like Navistar (NYSE:NAV), PACCAR (Nasdaq:PCAR) and a host of suppliers to the truck industry like Magna International (NYSE: MGA). European sales are running strong (up 65% in January) now, and North American sales are expected to be strong through 2011 and 2012, before peaking some time around 2013. That is a lot of time to make hay, to say nothing of the possibility that companies more leveraged to emerging market demand may be able to stave off some of the inevitable decline in North American and Western European markets in a few years' time.

How to Play the Next Leg
As a whole the commercial truck sector has enjoyed a strong rally, with Navistar and PACCAR doubling over the past two years and Cummins and Magna jumping more than 300%. That said, the rally across the sector has not left all of the stocks with equal prospects.

For instance, while Cummins is clearly a very high-quality company, there just does not seem to be as much upside left here as in a company like Magna. Likewise, Navistar and PACCAR both seem to have room to run further so long as higher interest rates (whenever they arrive ...) do not seriously undermine the truck market. That said, the trucking market is doing well these days in terms of freight volume and truckers will eventually need to replace and expand their fleets. While investors may want to wait for an even better bargain in a name like Cummins, there are still some values to be had around the sector today. (For more, see Railroad, Trucking Earnings Growth Set To Keep Rolling.)

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