Opinions
Gordon Reid
Lear Corp.
LEA-N
TOP PICK
Feb 17, 2016
$0.480
Stock price when the opinion was issued
Automotive
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(A Top Pick Oct 03/18, Down 19%) He's disappointed with its performance, but he continues to buy it, because Lear is till doing good things. 62% of their business is outside America. They trade at a cheap 8x earnings and boast a free cash flow yield over 10%. This should be higher, but the whole sector is out of favour. Be patient.
Automotive
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Are a tier-one supplier of car OEMs, making seating systems and advance power management. The car industry faces chip shortages, so Lear is effected by the number of units it can deliver to carmakers, but this backlog is starting to decline and normalization is happening. Another tailwind if that electrification will boost the power management business, which boasts high margins. Lear has a good 8% free cash flow. Buy, hold and be patient. (Analysts’ price target is $167.27)
Automotive
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(A Top Pick Apr 21/23, Up 1%)
Auto parts, attuned to electrification. Very good operator. Not much going on in past year. Technology needs to catch up on EVs so that consumer fully buys in. Poised to do extremely well on margins and profitability. When the stars align, will see a lot of action here. Not if, but when.
Automotive
A secondary automotive play in 35 countries. They manufacture automotive seat fixtures. Very effectively managed. Trading at a very nice multiple of about 10X earnings, yet there growth is in the mid-teens. Dividend yield of 1.13%. The entire auto industry is about 55 million units, with about a 3rd of that being in North America. The European market is just getting off its back in terms of automotive recovery. Also, the opportunity in the emerging markets is great with the move towards the middle class.