Martin Hubbes, CFA Linamar Corp LNR-T TOP PICK Feb 15, 2011

Believes is a good time to buy auto part manufactures due to all time low sentiment. Current share price is a bargain price given fundamentals. Not just auto part maker with agriculture exposure, and other parts of the economy. Leadership very strong, and is grown organically. Would recommend investing, and holding for the long term. 

Sideways trading range, as have US auto parts. Nothing too exciting, unless perhaps as a value play. On the sidelines.

Provides an opportunity. Extremely well managed. Very integrated into auto manufacturing, as is MG. Multiple is slightly less than MG's. Hold for the long term.

Parts go back and forth over the border so often, not sure how you'd keep track of the tariffs. Both Trump and Canada see auto parts as important to the US. Wouldn't be surprised if affected by tariffs less than other industries.

It should have done better since it beat expectations and raised guidance. Next year's expectations are not in the double digit range. Earnings are 6 to 6 1/2 X  which make it attractive to hold or buy. He has reduced their holdings from overweight to neutral weight. They plan to introduce a share buyback.

Auto parts could be impacted negatively by potential US tariffs. Rough technicals, 200-day MA very flat and moving down, with stock trading below that. 200-week MA also flat and starting to go down. PE always looks cheap, value trap.

Frustrating. Earnings growing about 15% per annum, yet still trades well below book value. Global autos have been hated. As production comes back the industrial economy will pick up, though agriculture may be a bit sloppy. 

Would be vulnerable because it's a manufacturer that exports to the US. Global sales footprint, with 15% being sold into the US. Factories in US are ~10-15%, with others in Canada and around the world.

Don't sell in a knee-jerk reaction on the basis of one variable that may or may not come into force. Stock prices already discount everything that's fundamental to the outlook of a company. Instead, think about valuation, whether it's easy to substitute the product, customer loyalty, effect of tariffs on USD, and how long the tariffs will last.

Don't yet know how things are going to shake out. Rhetoric is at an all-time high. Short term, it's impacting our economy because the US is our largest trading partner. Reality is that there's a lot of value-added auto manufacturing in both Canada and US; the 2 countries are inextricably linked. Tariffs will be punitive for both Canada and the US.

Hope is not an investment strategy, but we have to hope that rational heads can prevail so that there continues to be a steady flow of goods across our borders.

The names on this list are plenty. Start with the industrials, for instance. He's a big fan of BBD.B, but they make everything here in Canada.

An aerospace name like CAE, the rails, auto components like LNR and MG.

Prefers Linamar to Magna for its much lower EV of 6x, and they have diverse businesses, like agricultural equipment.