) since General Motors (GM
) spun it off in 1999 at 17 a share. The stock has zoomed to 41. Tony Dong of Munder Capital Management, who owns shares, says the maker of drivelines and chassis for trucks, SUVs, and cars has a ways to run. "Axle is a play on the strong truck market," says Dong.
At 9.7 times consensus 2004 earnings estimate of $3.98 a share, Axle is cheap compared with its peers, he says. It is cash rich, with an estimated free cash flow this year of $200 million. Axle will repurchase 2.5 million shares in 2004, but that, he says, won't prevent it from initiating a dividend. Jon Rogers of Wachovia Securities, which has done banking for Axle, rates it outperform, with a six-month target of 46. He sees it paying out 36 cents a share in 2004, on profits per share of $4.05 -- up from $3.65 in 2003 and rising to $4.25 in 2005. With its "strong performance quarter after quarter, Axle is a most attractive bargain," says Rogers.Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. See Gene on Fridays at 1:20 p.m. EST on CNNfn's The Money Gang.