Linamar Corp (LNR.TO)

Stock vs. Stock. LNR-T vs. MG-T. LNR-T had a disappointment when it pulled back. He believes the auto cycle is not over. Asia could slow down, but Europe is growing. LNR-T has a lot of efficiencies in the drive train. They have beat estimates so much for so long. He likes both stocks.

His research says that the average age of cars are still pretty old, so there shouldn't be a lot of demand for new cars. It should be okay. He is not familiar with its evaluation details. He thinks the stock will be fine though. Feels that there is lots of room to go up.

It is the most expensive of the three, but it has been a fantastic performer. They got hit on the earnings because they did not beat them by as much as in the past. He has MRE-T and MG-T.

Comparing with Magna. He was surprised that they went down today, because concistant strong sales in the auto sector and the American fleet is aging, along with low interest rates, means that the car companies are nowhere near their peak production.

Very impressive company, impressive management, buying opportunity. Doesn't get as much attention as Magna, because it's nowhere near the size. Linamar's costs are in Canadian dollars, so it has a cost advantage over the American producers.

Right now the automotive sector seems to be firing on all cylinders and he sees sales, particularly in North America, at a very high level. In this environment, the automotive parts companies are doing very well, and a lot of their pricing is in US$’s. In the long term, more and more of these companies are going to benefit from outsourcing. They also own Sky Jack where sales have been picking up with improving margins.

This has lagged both Magna (MG-T) and Martinrea (MRE-T). It was probably 1^st out of the gates in terms of acceleration and its ability to leverage its position. A very good company. The other 2 probably have more leverage to a falling Cdn$. This one is more hedged and has a lot of plants all over. An excellent company and very well positioned. (See Top Picks.)

Had a tremendous run over the last couple of years. It has beaten earnings something like 12 out of the last 13 quarters. The valuation multiple compared to Magna (MG-T) and Martinrea (MRE-T) is somewhat higher. Well positioned, but he finds the valuation is higher and he just doesn’t know if they’ll keep beating estimates. Not overly bullish on the sector right now. (See Top Picks.)

This has been a very, very impressive story. They keep on exceeding expectations and keep on booking huge orders. Still firing on all cylinders. Getting very good traction with their boom business and are taking market share globhally. Expects them to make some deals because they are generating a lot of cash. Have been beating expectations over the last 15 quarters. A solid name.

An excellent company. A very good auto parts manufacturer. He thinks it is going higher from here.

You are in the 8^th or 9^th inning of these. These are cyclical stocks and are at a valuation high. $112.00 or 42% upside, but cyclical stocks always look good at the top. Don’t add this now to your portfolio.

Has always liked this. There is room to grow for all companies connected to the auto industry. Fundamentally the balance sheet is stronger than ever. Has had a very good run. If you are looking at it from a dividend paying perspective, the yield has basically dropped to nothing right now.

The automotive business globally is growing. Even in places like Europe, where the economy is slow. Asia is growing. This company makes the parts. Not only are they on the rising tide that lifts all boats, they have actually been gaining market share and contract wins. Expects the performance is going to continue to match the stock price gain. They are in a prime condition to gain from the $0.80 Cdn$. Yield of 0.51%.

Excellent in motor industry parts. Dynamic leadership. Deeply embedded in China and other parts of the world. Stock has been doing very well. Probably a Buy here.

It is very cyclical. Just play the seasonals. It will probably sit here until the end of February when there is a seasonal car buying trend.