Opinions
Gordon Reid
Lear Corp.
LEA-N
PAST TOP PICK
Mar 16, 2017
$146.770
Stock price when the opinion was issued
Automotive
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PAST TOP PICK
(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.
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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)
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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 Top Pick Feb 17/16. Up 40%.) The maker of car seats for tier 1 automakers. They are in 35 countries and are not just captive to the 17.5 million units that are coming out of the US. They also have a feeder system into the 22 million European units, and about 26 million in China and Asia. A very, very strong network globally. Trading at a very modest multiple of less than 10X earnings.