Linamar Corp (LNR.TO)

Second-largest auto-parts maker in Canada. Primarily the drive trains, which is the most important part of the car. Probably have the best growth prospects. $2.3 billion in their order book. Have exposure to growth in North America. Have been buying cheap factories in Europe as well as opening new factories in places like China and the emerging markets. Dividend yield 1.37%.

Linamar (LNR-T) or Magna (MG-T)? She prefers Magna which is more diversified.

Doesn’t own any car part manufacturers but he would own them before he would own the auto companies. They’ve had a big run and he thinks it’s a little late to be looking at them now. If they corrected some he could be interested again.

They guided their numbers down. The past 3-4 years have been tumultuous. But it is still a good stock long term. Give it a couple of quarters. Trends in automobiles are in their favour. Don’t get shaken out of your position.

Reporting their quarter next week. News announcements can often be a trigger for volatility. Chart shows support at about $22 which it broke out of in late 2012. Stock will probably come back and retest support before it starts to move away again. You might consider putting a stop in at around $25.50 and there might be a chance to pick it up to around $22 again.

(A Top Pick Jan 27/12. Up 61.95%.)

For the next 5 to 10 years the sector is ok. There will be corrections. We have broken out from a resistance area. Depending on what kind of trader you are, buying breakouts can work if you use trailing stops. Thinks markets will pull back in Feb. so wait until then.

(Top Pick Jan 27/12, Up 24.90%) He was seeing an auto recovery in the states. It is building a base. This is very bullish. It will break out and move higher. You could re-acquire it then.

Big rebounds in share of each of the new models coming through is growing. Opening factories in many countries.

Are bidding on a US parts manufacturer. He likes the auto sector but it is a very cyclical play. When it has done well for a couple of years you want to see about getting out. When the market turns down it will go down hard. Okay as long as it stays above support. There is not a lot of upside. It is a range trader upper teens to $21 or 22.