Peter Hodson Magna Int'l. (A) MG-T TOP PICK Aug 03, 2016

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.

It has been lowering guidelines and the sector is not great with auto parts companies being impacted by tariffs. He likes Linamar better. It is cheaper and more diversified with an industrial side, and would be less impacted by tariffs.

25% tariffs on auto parts would be terrible for this name, life-changing. Valuation very attractive. Always very profitable, great management. Capital intensive and low ROIC, so he doesn't like this type of business.

Trades on the TSX, and has major global operations. But impacted so much by what happens with trade.

Most of the drop has to do with the tariff situation. Recent numbers were really good, great balance sheet, amazing footprint, global manufacturing powerhouse. Nice dividend.

Not the right time. Big exposure to tariffs. Business is capital intensive and highly competitive. Not a compounder. News on tariffs is so volatile and unpredictable.

His preference in the space. Very well integrated into the major auto companies, as they can't live without Magna at all. Profitable, makes money every year. Buy it when things look awful.

It won't pull back much from here. Given tariffs, this space is uncertain, but eventually we will settle this tariff war. Auto manufacturing is so emeshed between both countries that it would take a very long time to rejig it. This or Linamar are fine, but Magna pays a higher PE, though trades at a higher price-to-book. Your horizon must be long to own this, like 3-4 years.

Will be affected by tariffs. Cyclical business, with 5-6% operating margins over time. Eventually, the multiple will rerate. Owns now, but not sure he will 5 years from now once the cycle plays out.