Magna Int'l. (A) (MG.TO)

Generally over the summer, higher beta plays like this often soften a bit. It broke out bullishly recently, almost parabolic, and could be over-bought currently. It may pull back towards $75-$80. He would be a buyer on the pullback.

This is a great company. Magna is an assembler (of cars) which is a good business. As cars become more technologically advanced, companies will probably rely more heavily on assemblers who can integrate the technology into the car. There are short term headwinds from NAFTA and potential reduction in car sales. He sees these as short-term risks and expects the company to be stronger three years from now than today.

They just beat expectations and raised guidance. It accelerated upwards. The auto parts companies don’t seem to reflect risks with NAFTA. He feels it is because the auto parts companies in the US are not actually asking for changes.

If no deal is reached on NAFTA, then the existing rules will continue to apply. He does not think it will have a material impact. The chart is saying the market is not worried about it.

He would stay out until the tariff on all foreign cars issue with the US is clearer. Trump is too unpredictable. Excellent company. Trading at 9 times earnings, it looks cheap.

One of the more shareholder friendly companies. They bought back over 30% of their outstanding shares and increased the dividend 10%. It is a bit of a slower growth company but the valuation justifies it. A lot of bad news with NAFTA negotiations is already baked into the stock.

He likes the auto parts companies. Average age of cars in the US is 11 ½. You will need parts for new cars and used cars. Positive in the 16 of the last 22 years. Seasonality to but is in the spring. Picks around July. Technically looks very solid. Higher highs and higher lows. Everything looks favorable for the stock. Trading at 10 times earnings.

Looks as good as you want a stock to look. Setting new highs. Volume is good. Auto stocks and auto parts stocks have been terrible to trade, but this one is a good one.

A lot of people don’t like the auto business, yet its price just made another 52 week high. This is a cheap stock and very well run company. They have divisions in different geographic areas and are expanding into autonomous cars. Beware that it is a cyclical business. He would continue to hold it.

The car parts companies have done well and they remain cheap. Magna just announced a partnership with Lyft on self-driving cars. Interesting. It's trading at 52-week highs, which makes him cautious. He doesn't see a resurgence in auto parts sales. Trading at 8.5x forward earnings. Linamar is a slightly better play.

It's been crushing it in revenues and earnings. Incredible management. Multiple only 9x forward earnings. Why so cheap? It's cyclical. Earnings continue to grow. Pays a 2.25% dividend.

(A Past Top Pick on May 17, 2017, Up 28%) He's contined to buy it now. It's cheaper and grows faster than its peers. It benefits as Europe improves, and is the Canadian leader in auto parts while stacking up to U.S. peers. Pays a 6% dividend.

He is watching it. His hesitation is where we are in the business cycle. Auto cycles tend to be very cyclical. We are late cycle. Don't get into it now.

They've done a great job over the years getting more and more of their parts into vehicles. But there are many headwinds: tariffs, and we're late in the auto cycle with peak sales. Have an exit point just in case, but it could be breaking out, too.

Marco: The car business is tough. We're seeing delinquencies on sub-prime auto loans. Micro: Magna is a well-run business, but facing major shifts in how cars are manufactured. Electrification may make some of Magna's factories not necessary.