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

EV industry has slowed after tons of hype in 2023. Shift to EVs is measured in decades, not in years. See his Top Picks.

It's been stuck around $60-70 for a long time. Looks cheap, but they always lower guidance. The PE looks attractive and so it the balance sheet, but the car business is slowing and tough.

Current price is attractive for investors (valuation very fair). Stock price appears to be near book value. ROE is around ~10%. Dividend yield is stable and attractive. General direction of auto industry is strong. 

Better off owning suppliers than car companies, which are caught trying to straddle combustion and EVs. Prominent Canadian company. MG can take advantage of its size, LNR is really well run. LNR is his choice for the long run, more nimble.

He tends to not own this type of highly cyclical business.

International. Top 3 supplier globally. Inexpensive multiple of 9x earnings, but volatile. Higher interest rates, labour and commodity costs. Microchip supply chain issues. Cautious about operating environment. Good management team.

Will benefit from overall increased car sales, both EV and traditional. ROE is above market average. Balance sheet quite strong. Impressive yield of 3.6%, higher than market. Can buy shares here confidently.

EPS of $1.33 missed estimates of $1.47; sales were $10.45B nearly identical to estimates. Magna International's two largest business units by revenue also have the widest margins, as the smaller seating systems and complete vehicles segments need a surge in global vehicle output to expand their 3% adjusted Ebit margins. Magna has developed a product portfolio and customer base that can win wide-margin business as automakers perpetually pursue advances in safety, efficiency and connectivity. The company forecasts a 1.2% compound annual growth rate in North America new-vehicle production through 2026, a contraction in Europe and 4% gain in China. Magna's body exteriors & structures segment revenue grew 4% to $4.2 billion as adjusted Ebit margin widened 170 bps to 6.7%. The power & vision unit generated $3.8 billion in revenue -- a 25% jump -- with 230 bps worth of margin expansion to 6.1%. The stock is dropping today as investors seem to be focusing more on the 'miss' than on the improved margin outlook. We think it still has potential and it is very cheap at 8X earnings. It is expected to show overall decent earnings growth this year. 
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He owns other industrials. Not looking at it going forward.

Does not own shares. Does not think growth is going to continue for company. Major clients are traditional auto companies (Ford etc.) that are not growing. Would not recommend buying. 

Don't buy based just on a nice dividend and low valuation. Lots to like, but stock's gone nowhere. Hard to figure out where the value is. He wants to own quality and the best, and this one doesn't make the cut.

Quality manufacturer. Well run. Generates really good ROC and free cashflow. Hangup right now is related to uncertainty on the economy. Potential NA recession not good for auto sales. Good name in the space.

Does not own shares. Volatile stock. Scores 8/10 fundamentally. Would hold of already own. Not a good time to invest otherwise. 

Is sensitive to the economy which he sees weakening. Cyclical. The consumer is stretched and the savings rate is declining. Yes, PEs are cheap, and MG supplied gas-engine as well as E-cars. He likes the auto companies, but now is not a great time for them.

Transition to electric has caused a bit of pain on retooling factories. Once the transition is complete, they can't go back and forth. Union negotiations will impact car prices. He'd prefer an actual automaker like Toyota.

A good company and major player in car parts. Shares have been volatile lately due to higher interest rates, labour costs, commodity prices and microchip prices. However, inflation is easing and so are supply chain bottlenecks. Good profits and balance sheet. Hold and enjoy the yield.

Since peaking in early 2021, MG has been in a downtrend. Now, it's forming a base. If it breaks $85 and stays there a few weeks, that's good.  But it keeps rubbing against that resistance level and he doesn't see a catalyst to take it higher.