Should You Invest in Paccar (PCAR)?

Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its “SCCM Enhanced Equity Income Fund” second-quarter investor letter. A copy of the letter can be downloaded here. US equities surged in the second quarter, with the S&P 500 gaining 10.9% while the Russell 1000 Value was up 3.8%. The composite underperformed both of its benchmarks in the second quarter, returning -1.2% (net) compared to a 1.9% return by the S&P 500 Buy-Write Index (BXM) and a 3.7% return by the SPDR Bloomberg High Yield Bond ETF (JNK). In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, SCCM Enhanced Equity Income Fund highlighted stocks such as PACCAR Inc (NASDAQ:PCAR). PACCAR Inc (NASDAQ:PCAR) manufactures and distributes light, medium, and heavy-duty commercial trucks. The one-month return of PACCAR Inc (NASDAQ:PCAR) was 3.63%, and its shares gained 3.95% of their value over the last 52 weeks. On August 29, 2025, PACCAR Inc (NASDAQ:PCAR) stock closed at $99.98 per share, with a market capitalization of $52.5 billion.

SCCM Enhanced Equity Income Fund stated the following regarding PACCAR Inc (NASDAQ:PCAR) in its second quarter 2025 investor letter:

"PACCAR Inc (NASDAQ:PCAR) – The stock was purchased in the strategy in the quarter. Paccar is a manufacturer and distributor of trucks and aftermarket parts. It is a global technology leader with advanced powertrain technologies, leading brands (Kenworth, Peterbilt) and a favorable manufacturing footprint. The company has a diversified business model with exposure to high-margin aftermarket parts and demand should be supported by increased infrastructure spending. While the impact of uncertainties and tariffs result in a more muted short-term growth outlook, management expects margins to gradually improve over the year as price versus cost re-balances. The company’s inventory level is at 3 months, which is below historical averages and industry peers, positioning the company for an industry upturn. Paccar trades at an attractive valuation – 14x 2026 EPS, 2.7x book value with a 3.8% dividend yield."

PACCAR Inc (NASDAQ:PCAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held PACCAR Inc (NASDAQ:PCAR) at the end of the second quarter, which was 35 in the previous quarter. PACCAR Inc (NASDAQ:PCAR) generated revenues of $7.5 billion and adjusted net income of $724 million in the second quarter of 2025. While we acknowledge the potential of PACCAR Inc (NASDAQ:PCAR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered PACCAR Inc (NASDAQ:PCAR) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.