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Introduction
Wabash National Corporation (NYSE:WNC) is trading at attractive valuation ratios compared to its peers, while also presenting a solid margin of safety in terms of intrinsic valuation, as its enterprise value is significantly lower than its intrinsic value, as computed through a DCF model, based on multiple scenarios.
Despite the attractive valuation, for the past 10 years, WNC has seen revenues and net income only slowly increasing. Even though, having a market share of about 17% of total trailer production in the U.S. in 2022, the company could be recognized as one of the industry leaders, the trailer production industry has failed to record significant increases for the past years, and has been more or less stable in terms of total output and general demand.
I believe that WNC presents a significant margin of safety as an investment by also being undervalued compared to similar companies and by consistently generating a satisfactory amount of free cash flow. Despite the high likelihood of low industry growth, the company is ensuring that a notable part of cash flows is returned to shareholders through dividends and stock buybacks.
Company Overview
Wabash National Corporation designs, manufactures, and distributes connected solutions for the transportation, logistics, and distribution industries primarily in the United States, operating through two main segments: Transportation Solutions and Parts & Services. The Transportation Solution segment includes the design and manufacturing operations of transportation-related equipment and products, such as dry and refrigerated van trailers, platform trailers, tank trailers, truck-mounted tanks and the company’s wood flooring production facility. Parts & Services segment includes Wabash Parts LLC, Trailer as a service initiative, the company’s engineered product business, and other composite products.
The company started paying dividends to common shareholders in fiscal 2017, paying out close to $17 million each year. This amounted to, excluding 2020 and 2021, a dividend payout ratio of about 19.5% on average. Dividends paid in the first half of 2023 are consistent with previous year levels. WNC is currently trading at a dividend yield of 1.50%. As for expected future dividend rates, the company’s stated dividend strategy is to maintain dividend levels from previous years.
Besides paying a dividend, the WNC started buying back shares more aggressively in 2015. Since then, the company has returned more than $425 million through stock buybacks, buying back an average of $53.48 million per year. Together with dividends, Wabash National Corporation has returned $529 million to shareholders since 2015. In the first 2 quarters of 2023, the company has recorded buybacks of $37.90 million, already above 2023 fiscal year level of $34.28 million. WNC’s stated strategy in terms of share repurchases is to regularly buyback shares in order to offset stock-based compensation, but also opportunistically buyback shares. The fact that WNC has been buying back its own shares at such a rate could indicate that there is a belief that the company is undervalued. The company’s buyback policy has been a great way to return money to shareholders for the past few years, as WNC has been trading consistently in between $14 and $20, and the average price the shares were repurchased at is lower than the current price.
As a large integrated manufacturer, WNC should be able to leverage their long-term and well established relationship with customers and suppliers. In January 2023, the company entered into a multi-year order agreement with J.B Hunt Transport Inc., as stated in the company’s most recent annual report and displaying WNC’s leading position in the market and its core customer relationships. Wabash National Corporation has established relationships as a supplier for many large companies in the US. some of which include: Werner Enterprises Inc., Wells Fargo Equipment Finance Inc., Kroger, Nestle USA, Target Corporation, Walmart, Dollar General corporation. Wabash is recognized as a leader in the trucking industry in terms of innovation, with the new DuraPlate and EcoNex technologies having a big impact on the industry. Moreover, in December of 2021, WNC announced a partnership with Purdue University in order to accelerate the company’s innovative processes.
DuraPlate is an advanced panel technology with extreme durability and damage resistance. Mainly used in commercial transportation, the 100% recyclable material provides weight saving efficiencies and cube transportation capacity increases for dry freight trailers, truck bodies, and portable storage containers, apart from other applications.
EcoNex is a patent-pending structural composite technology with potential applications in the transportation industry, apart from other. EcoNex panels are lighter, resulting overall weight reduction; stronger in construction, eliminating the need for other metals; more thermally efficient, resulting in increased operating efficiencies. EcoNex is used for refrigerated freight truck bodies, refrigerated vans and van trailers.
More than 85% of revenues and operating income is generated by the Transportation solution segment. Below there’s a quarterly breakdown of operating segment performance.
|
Transportation solutions ( in $ millions) |
Q3 2023 |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Q3 2022 |
Q2 2022 |
Q1 2022 |
Q4 2021 |
|
Consolidated Segment Revenue – External & Intersegment |
535.9 |
579.5 |
539.0 |
599.0 |
607.4 |
559.8 |
447.7 |
387.6 |
|
External Revenue |
530.7 |
574.9 |
536.4 |
596.9 |
605.2 |
557.1 |
446.8 |
386.4 |
|
Intersegment Revenue |
5.18 |
4.56 |
2.59 |
2.06 |
2.27 |
2.68 |
0.91 |
1.19 |
|
Operating Income/Loss |
82.21 |
106.4 |
81.23 |
65.67 |
62.83 |
45.06 |
28.26 |
-6.67 |
|
Parts & Service ( in $ millions) |
Q3 2023 |
Q2 2023 |
Q1 2023 |
Q4 2022 |
Q3 2022 |
Q2 2022 |
Q1 2022 |
Q4 2021 |
|
Consolidated Segment Revenue – External & Intersegment |
51.89 |
57.03 |
43.95 |
48.66 |
46.40 |
47.33 |
41.65 |
33.36 |
|
External Revenue |
51.12 |
55.96 |
42.57 |
47.50 |
45.34 |
46.63 |
40.77 |
32.79 |
|
Intersegment Revenue |
0.78 |
1.07 |
1.38 |
1.15 |
1.06 |
0.71 |
0.88 |
0.57 |
|
Operating Income/Loss |
11.36 |
11.89 |
8.59 |
7.74 |
7.68 |
7.64 |
6.05 |
1.48 |
Author’s calculation
Financials
Even though WNC is fairly leveraged, with a D/E ratio of over 80%, interest rate risk is insignificant, as the main debt component is represented by senior notes due 2028, bearing an interest rate of 4.50%, paid semiannually.
- Balance Sheet Strength
|
Selected Balance Sheet Items |
|
|
Cash & Short-Term Investments |
$ 99.61 |
|
Total Assets |
$ 1,314.41 |
|
Debt – Total |
$ 374.93 |
|
Common Equity – Total |
$ 490.71 |
|
Tangible Book Value |
$ 227.67 |
|
Working Capital |
$ 310.15 |
|
Net Operating Assets |
$ 766.49 |
Source: Author’s Calculation
WNC’s capital structure has been fairly consistent over the past years and will most likely remain so in the foreseeable future.
|
Selected Balance Sheet Ratios |
|
|
Total Debt Percentage of Total Assets |
28.5% |
|
Total Debt Percentage of Total Capital |
43.3% |
|
Total Debt Percentage of Total Equity |
76.4% |
|
Interest Coverage Ratio |
15.77 |
|
Dividend & buyback coverage |
2.54 |
|
Earnings Retention Rate |
0.61 |
|
Dividend & Buyback Payout Ratio – % |
39.39% |
|
Current Ratio |
1.83 |
|
Quick Ratio |
0.96 |
|
Working Capital to Total Assets |
0.24 |
|
Operating CFs to tot. debt |
0.14 |
|
Equity multiplier |
3.12 |
Source: Author’s Calculation
With a solid cash position and an interest coverage ratio of over 15, WNC should have limited default risk attributed. WNC has a BB- S&P long-term issuer rating, with stable outlook. I computed the dividend & buyback ratio in order to highlight the company’s ability to not only continue paying dividends, but also buying back stock consistently as it has done in the past. Earnings retention rate was also computed by taking into consideration stock buybacks; regular earnings retention rate is 0.93, or around 93%.
Besides having a fairly balanced capital structure, most liquidity/balance sheet ratios have been consistent over the years, asserting WNC’s balance sheet stability. I believe that it is rather unlikely to see any significant changes in the company’s balance sheet in the foreseeable future.
2. Profitability Metrics
|
Operating & Efficiency metrics |
2023 Q3 |
2022 Q3 |
|
Gross Profit Margin – % |
18.9% |
13.6% |
|
EBITDA Margin – % |
14.3% |
10.0% |
|
Operating Margin – % |
12.3% |
8.1% |
|
Income before Tax Margin – % |
11.6% |
7.3% |
|
Income Tax Rate – % |
24.6% |
23.4% |
|
Net Margin – % |
8.8% |
5.6% |
|
Free Cash Flow Yield – %, TTM |
14.8% |
8.8% |
|
ROE TTM |
50.6% |
12.2% |
|
ROA TTM |
16.8% |
3.8% |
|
ROIC TTM |
27.7% |
8.0% |
|
Asset Turnover, TTM |
1.95 |
1.90 |
|
Accounts Receivable Turnover, TTM |
10.94 |
9.70 |
|
Average Receivables Collection Days, TTM |
33.45 |
37.72 |
|
Payables Turnover, TTM |
9.57 |
9.85 |
|
Average Payables Payment Days, TTM |
38.25 |
37.14 |
|
Inventory Turnover, TTM |
6.50 |
7.27 |
|
Average Inventory Days, TTM |
56.29 |
50.31 |
|
Average Net Trade Cycle Days, TTM |
51.49 |
50.89 |
Source: Author’s calculation
There have been significant improvements in terms of operating margins compared to the same period from previous year. Long-term outlook for operating margins is a bit more cautious, as EBIT margins should revert to historical levels of 7-9%. Now addressing the recent quarterly report, revenue was reported at $632 million, 6.76% lower than the $678 million forecasted. Third quarter revenue was also lower than fy2022 revenue. The company attributed the negative revenue surprise to a softening in the industry demand. Third quarter EPS came in at $1.16, about 13% higher than forecasted, due in the most part to lower manufacturing and materials cost. Even with lower industry demand, Wabash National has good operating margins and is able to generate a satisfactory level of cash flows from operations.
Major Risks
The transportation industry in the US is highly cyclical, as it has experienced 3 cycles in the past 20 years. Moreover, the trailer industry has been consistent over the past years, barely recording any growth. Approximately, 308,000, 286,000, 288,000, 323,000, and 328,000 for the years ending 2015, 2016, 2017, 2018, and 2019, respectively, while annual new trailer production levels for 2024, 2025, 2026, and 2027 are expected to be at 275,000, 309,000, 286,000, and 298,000, respectively (as presented in the most recent 10-k report filled with the SEC). The lack of industry growth translates into lower growth rates for the company, as it now has to increase its market share consistently in order to achieve good levels of revenue growth.
As I will later present in the article, not only does WNC trade below average valuation multiples for its industry and sector, but the “undervalued” character is consistent with the level that the company was trading at for the past 5 years. In other words, for the past 5 years, WNC has been consistently trading at levels below industry and sector averages in terms of valuation multiples, meaning that the company was undervalued for most of the time for the past 5 years. At this point in time, with no catalyst event in sight, there is a good chance that WNC will continue trading at such levels. Even though the company could still be regarded as undervalued, the absence of a catalyst event could mean that WNC could continue trading at such levels in the foreseeable future. “Such levels” refer strictly to relative valuation levels, meaning similar valuation multiples as the company was trading at for the past 5 years.
Valuation
Looking at WNC, it is currently trading at levels that the company has been, on average, trading at for the past 5 years. There have not been any crucial changes regarding WNC’s valuation multiples for the pasts few years, even though the company is still trading below industry and sector averages.
|
FOCF Yield |
|
|
Free Cash Flow Yield – % |
5.75% |
|
Free Cash Flow Yield – %, 5 Year Average |
6.18% |
|
Dividend Yield |
|
|
Dividend Yield – Common Stock – % |
1.50% |
|
Dividend Yield – Common Stock – %, 5 Year Average |
2.06% |
|
Price to Book |
|
|
Price to Book Value per Share |
1.86 |
|
Price to Book Value per Share, 5 Year Average |
2.07 |
|
Price to Sales |
|
|
Price to Revenue from Business Activities – |
0.38 |
|
Price to Revenue from Business Activities – 5 Year Average |
0.43 |
|
EV to Sales |
|
|
Enterprise Value to Revenue from Business Activities – Total |
0.49 |
|
Enterprise Value to Revenue from Business Activities – Total, 5 Year Average |
0.57 |
|
EV to EBITDA |
|
|
Enterprise Value to EBITDA |
3.63 |
|
Enterprise Value to EBITDA, 5 Year Average |
9.35 |
|
EV to FCF |
|
|
Enterprise Value to Free Cash Flow |
21.22 |
|
Enterprise Value to Free Cash Flow, 5 Year Average |
20.14 |
Sources: Seeking Alpha and Author’s Calculations
For the following table I have chosen the median value due to the fact that many sector and industry averages were negatives. Compared to the average sector and industry valuation multiples that were positive, WNC was still significantly below. It should be noted that average industry dividend yield was 2.2%, and average sector dividend yield was 3.3%, higher than WNC’s 1.5%.
|
Trailing 12m |
WNC |
Machinery industry |
% from industry median |
Industrials sector |
% from industry median |
|
EV/SALES |
0.49 |
2.2 |
-70.59% |
1.63 |
-66.67% |
|
EV/EBITDA |
3.63 |
9.5 |
-44.59% |
11.60 |
-45.33% |
|
P/E |
4.59 |
10.80 |
-46.53% |
16.67 |
-49.53% |
|
P/CF |
5.54 |
7.8 |
-30.77% |
12.79 |
-20.59% |
|
P/B |
1.86 |
2.9 |
0.00% |
2.47 |
16.67% |
|
Div. Yield |
1.50% |
1.37% |
7.14% |
1.56% |
0.00% |
Source: Seeking Alpha and Author’s Calculations
Compared to its industry and sector peers, WNC is significantly undervalued, as it is trading well below multiple valuation ratios, and at similar dividend yields. On a more negative note, for the past 5 years, WNC has been generating on average a ROE of 8.20% and ROA of 2.84%, below other companies from its sector with similar market cap ($500m – $5b), who have, over the past 5 years, on average, generated ROA of 4.08% and ROE of 22.10%. It should be noted that 5 year averages of ROA and ROE are affected by the two years in which the pandemic had a major adverse effect on the business of those companies, including WNC. Compared strictly to other companies from its industry (heavy construction machinery) with similar capitalization ($500m-$10b), WNC recorded ROA of 9.76% in 2022, and ROE of 31.05% in 2022, higher than industry averages of 5.10% and 8.96%.
In terms of capital structure, WNC is not highly levered compared to similar companies, having a long term Debt/Equity ratio of 82.4%, compared to the 156.15% of companies from its sector, while companies from its industry are even more leveraged, with an average long term Debt/Equity of 262%.
One of the reasons WNC is trading at lower multiples could be its inability to record significant revenue and net income growth over the past 10 years. Ten year revenue CAGR was 4.84%, while 10 year net income CAGR was 1.40%. It should be noted that, for the past 6 years ( 2017-2022), the company was unable to generate a higher net income level compared to 2016, meaning that the 10.40% CAGR was driven by the 2013-2016 performance. In the first two quarters of 2023, WNC has recorded a net income of $125.54m, above FY2016 levels.
The industry as a whole is growing at slow pace, however WNC was and most likely will continue to be well positioned within the industry. Nonetheless, WNC is unlikely to experience high growth in the foreseeable future (unless a structural change in the business model occurs), not only due to current industry trends, but also partly due to current levels of retention ratio. As presented in its last annual report available at , ACT research is forecasting annual new trailer production levels for 2024, 2025, 2026, and 2027 of approximately 275,000, 309,000, 286,000, and 298,000, respectively. Average new trailer production during 2014-2019 was around 295,000.
For the DCF valuation, for estimating Kdp (pre-tax cost of debt), since WNC has a tradable bond on the market that matures in 2028, I have considered the YTM on the respective bond as a pre-tax cost of debt. For computing Kd (after tax), I estimated an average tax rate of 27% (consistent with state tax legislation and historical effective tax rate).
|
WACC inputs |
|
|
Stock Beta(5y,mo) |
1.57 |
|
Risk free rate |
4.78% |
|
Expected market return |
9.75% |
|
Cost of equity |
12.58% |
|
Cost of debt |
8.48% |
|
Cost of debt (after tax) |
6.19% |
|
Equity market value |
$ 1,010,956,900.00 |
|
Debt market value |
$ 516,532,357.64 |
|
WACC |
10.42% |
Author’s calculations
Market value of debt was calculated through the following model.
|
2023 |
2024 |
2025 |
2026 |
2027 |
2028 |
total |
|
|
Contractual Obligations by year |
$ 116,106.00 |
$ 25,389.00 |
$ 24,260.00 |
$ 23,654.00 |
$ 21,410.00 |
$ 418,000.00 |
$ 628,819.00 |
|
maturity |
0.5 |
1.5 |
2.5 |
3.5 |
4.5 |
5.5 |
|
|
weighted maturity |
0.092 |
0.061 |
0.096 |
0.132 |
0.153 |
3.656 |
4.190 |
|
interest expense TTM |
$ 20,375.00 |
Market value of debt |
$ 516,532.36 |
Author’s calculations
MV of debt= interest.pmt.ttm*[(1-(1/((1+Kdp)^wtm)))/kdp]+(BVdebt/((1+kdp)^wtm); where wtm is the sum of weighted maturities and interest.pmt.ttm is interest expense trailing twelve months; Kdp is pre-tax cost of debt, while BV debt is the book value of debt;
The WACC computed above will be used for all DCF analysis. Major input differences will be represented by projected revenue growth, EBIT margins, and CAPEX as % of sales.
DCF case #1: built using average analyst estimates for the following years and a more pessimistic general outlook;
Revenues: based on analyst estimation for 2023, 2024, 2025, followed by a 2.5% CAGR for the following years;
EBIT: based on analyst estimations for 2023, 2024, 2025, followed by an estimated EBIT margin of 8% in 2026, decreasing gradually back to historical average in the next years;
Cash flows from operations: for estimating cash flows from operations I assumed D&A expense will be around historical averages of 2% from sales, while non-cash adjustments and changes in NWC will also remain at average historical levels;
CAPEX: capex was assumed to remain at 2.5% of sales for the following period, slightly higher than historical averages;
|
in millions |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 |
|
Revenue |
$ 2,646.00 |
$ 2,412.00 |
$ 2,329.00 |
$ 2,387.23 |
$ 2,446.91 |
$ 2,508.08 |
|
EBIT |
$ 308.89 |
$ 222.49 |
$ 224.70 |
$ 214.85 |
$ 220.22 |
$ 225.73 |
|
Net Income |
$ 209.43 |
$ 146.36 |
$ 147.97 |
$ 140.78 |
$ 144.70 |
$ 148.72 |
|
CF from operations |
$ 312.09 |
$ 239.94 |
$ 238.34 |
$ 233.41 |
$ 239.64 |
$ 246.03 |
|
CAPEX |
$ 66.15 |
$ 60.30 |
$ 58.23 |
$ 59.68 |
$ 61.17 |
$ 62.70 |
|
Unlevered FCF |
$ 245.94 |
$ 179.64 |
$ 180.11 |
$ 173.72 |
$ 178.47 |
$ 183.33 |
|
DCF |
$ 233.76 |
$ 154.82 |
$ 140.58 |
$ 122.79 |
$ 114.24 |
$ 106.28 |
Author’s calculations
|
sum of DCF |
$ 872.48 |
|
terminal value – perpetual growth model |
$ 1,105.52 |
|
Discounted terminal value – perpetual growth model |
$ 640.88 |
|
Total intrinsic value |
$ 1,513.36 |
|
current EV |
$ 1,360.20 |
|
Potential upside to intrinsic value |
11.26% |
Author’s calculations
For the perpetuity growth calculation, I used an expected growth rate of cash flows of 1%. WNC’s intrinsic value is similar to its current EV (computed using market value of debt), or slightly higher than its EV, if EV is computed using book value of debt.
|
sum of DCF |
$ 872.48 |
sum of DCF |
$ 872.48 |
|
EV/Sales estimate |
0.55 |
EV/EBITDA estimate |
5.00 |
|
Revenue 2029 |
$ 2,558.24 |
EBITDA 2029 |
$ 255.89 |
|
EV/Sales exit value |
$ 1,407.03 |
EV/EBITA exit value |
$ 1,279.44 |
|
Total intrinsic value |
$ 2,279.51 |
Total intrinsic value |
$ 2,151.92 |
|
Current firm value |
$ 1,360.20 |
Current firm value |
$ 1,360.20 |
|
Potential upside to intrinsic value |
67.59% |
Potential upside to intrinsic value |
58.20% |
Author’s Calculations
EV/Sales and EV/EBITDA estimates are both lower than historical averages and industry and sector averages, in order to reflect the forecasted below average revenue and operating margin growth for the company. Despite that, WNC’s intrinsic value is more than 30% higher in both cases.
DCF case #2: a more optimistic estimation of future economic performance as the company will be able to leverage its competitive advantage and gain market share;
Revenue: assumed revenue was going to grow at an average of 3% over the next period, being consistent with historical revenue growth of 4%, but also taking into account WNC’s ROIC and retention rate of earning;
EBIT: ebit margin for 2023 is estimated to be around 12-13%, as the company posted strong results in the first two quarters. I assumed EBIT margins will gradually revert back to historical levels;
Cash flows from operations: for estimating cash flows from operations I assumed D&A expense will be around historical averages of 2% from sales, while non-cash adjustments and changes in NWC will also remain at average historical levels;
CAPEX: capex was assumed to remain at 2% of sales for the following period, consistent with previous years
|
in millions |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 |
|
Revenue |
$ 2,646.00 |
$ 2,725.38 |
$ 2,807.14 |
$ 2,891.36 |
$ 2,978.10 |
$ 3,067.44 |
|
EBIT |
$ 343.98 |
$ 327.05 |
$ 308.79 |
$ 289.14 |
$ 268.03 |
$ 245.40 |
|
Net Income |
$ 235.05 |
$ 222.68 |
$ 209.35 |
$ 195.01 |
$ 179.60 |
$ 163.08 |
|
CF from operations |
$ 337.71 |
$ 328.43 |
$ 318.27 |
$ 307.19 |
$ 295.15 |
$ 282.10 |
|
CAPEX |
$ 52.92 |
$ 54.51 |
$ 56.14 |
$ 57.83 |
$ 59.56 |
$ 61.35 |
|
Unlevered FCF |
$ 284.79 |
$ 273.92 |
$ 262.13 |
$ 249.37 |
$ 235.59 |
$ 220.75 |
|
DCF |
$ 270.69 |
$ 236.07 |
$ 204.59 |
$ 176.26 |
$ 150.81 |
$ 127.97 |
Author’s calculations
|
sum of DCF |
$ 1,166.38 |
|
terminal value – perpetual growth model |
$ 1,331.14 |
|
Discounted terminal value – perpetual growth model |
$ 771.67 |
|
Total intrinsic value |
$ 1,938.06 |
|
current EV |
$ 1,360.20 |
|
Potential upside to intrinsic value |
42.48% |
Author’s calculations
For the perpetuity growth calculation, I used an expected growth rate of cash flows of 1%. The company’s intrinsic value according to the respective model is above current WNC’s Enterprise Value of $1.33b (computed using book value of debt), or $1.53b (computed using estimated market value of debt).
|
sum of DCF |
$ 1,166.38 |
|
EV/Sales hist avg |
0.63 |
|
Revenue 2029 |
$ 3,128.79 |
|
EV/Sales exit value |
$ 1,971.14 |
|
Total intrinsic value |
$ 3,137.52 |
|
current EV |
$ 1,360.20 |
|
Potential upside to intrinsic value |
130.67% |
|
sum of DCF |
$ 1,166.38 |
|
EV/EBITDA 5 year hist average |
6.20 |
|
EBITDA 2029 |
$ 286.74 |
|
EV/EBITA exit value |
$ 1,777.81 |
|
Total intrinsic value |
$ 2,944.19 |
|
current EV |
$ 1,360.20 |
|
Potential upside to intrinsic value |
116.45% |
Author’s calculations
If WNC will continue to trade at historical levels of EV/EBITDA and EV/Sales, the company is significantly undervalued as the intrinsic values of the two models (with terminal values computed based on valuation multiples) are more than 100% higher than current enterprise value.
Conclusion
Wabash National Corporation is undervalued compared to its peers, having been traded at lower multiples for quite some time. Even though cash flow based models also suggest that WNC may be undervalued, in the absence of any catalyst event, there is a chance that share price could remain at similar levels. Other than that, WNC is significantly undervalued, operates through a business model that generates a good amount of free cash flow, and has also been returning good part of those cash flows to investors.
One of the reasons WNC is priced so cheaply in the market is the low growth rate of the industry, which could imply that Wabash National Corporation may have difficulties in recording higher revenue and operating income growth rates.
Besides being undervalued, another important aspect is WNC’s dividend and stock buy-back strategy, as the company has returned a significant amount of money to shareholders, mainly through stock buybacks. Also, the company could somewhat transition from share repurchase to dividend payments in the future, which could be a possible catalyst event. All else equal, increase in dividend payments would have a very similar effect to stock buybacks, with the exception of certain tax issues. However, dividends are more relevant for the market and get more attention from investors; WNC could benefit from an increase in popularity from such a change.
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