Allison Transmission Holdings: Mixed Bag For Investors - Seeking Alpha
Allison Transmission Holdings (NYSE: ALSN ) is a designer and manufacturer of fully-automatic transmissions destined solely for commercial and defense vehicles. These are burly workhorse transmissions that operate under extreme loads and long routes, not something you'd find in your mother's Kia Sorento. Fast-forward five years and Allison Transmissions saw its public IPO debut in 2012 as the PE firms looked to monetize on their investment, giving investors an opportunity to own a piece of the company as a standalone operation. The company sells substantially all of its transmission products to original equipment manufacturers (OEMs), who then install Allison Transmission products on their production vehicles. Relationships with OEMs are hard-won and paramount to company success, which gives the company a moat from upstart entrants into competition. Allison Transmissions likely owes part of this success to the prior General Motors association, although management can now lead this company to stand on its own. The company has now cultivated a reputation and Allison Transmissions is the industry leader, owning 63% of all fully-automatic transmissions sales for medium/heavy-duty on-highway commercial vehicles. Source: seekingalpha.com
