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

Magna (MG-T) or Linamar (LNR-T)? Assuming the Canadian government ratifies the TPP, early indications are that it would have a slightly negatively impact on auto parts companies, primarily because it would reduce the content that has to be produced domestically. Auto parts companies are followers. They lag auto companies themselves, which have had a huge run. Getting late in the game. Prefers this to Linamar. Has done very well as a stock.

They are doing well and have new business coming on in 2016/17 Even though they are based in Canada, their financials are in US$ and so when they report, they are down due to currency hits. 9 times earnings and growing at a reasonable rate. LNR-T is growing a lot more (20%) and trades at only a little more, so he prefers it.

Linamar (LNR-T) or Magna (MG-T)? 2 high quality auto parts companies. When you think about auto parts, it is really content per vehicle, and you have to assume that that is going to increase. Both companies are doing very well and have a lot of new program wins over the next couple of years, so he thinks we are going to see good content growth going forward. This one seems to have taken a hit here, and a big chunk of that might be because of its euro exposure, but don’t forget its balance sheet is very strong. On a relative value only, he would pick this one, but they are both very high quality companies. You could hold both.

A name that he has erroneously not owned for some time. Should have bought it in the 2008 crisis. Right now he is really interested in it, but is going to wait a little. Had a lot of exposure to Volkswagen, but the globalization of auto parts is something this company has been all over for a very long time and playing it very well. He’ll probably add on a dip.

Recently bought this. It is cyclical, so you need to be a little careful. It has come down sufficiently so that the price warrants taking a position here.

(Top Pick Dec 10/14, Down 2.05%) They disappointed last quarter. It is a super undervalued stock. You get paid to wait. It is outgrowing its competitors. It is a table pounder.

Doesn’t own the stock, but thinks that maybe he should. It took quite a beating because of the Volkswagen business. Has shown itself to be nimble, inventive, and in the long run it has paid back quite nicely. PE is exceptionally low. This is a growth stock and growth stocks tend to be more volatile. Not a bad time if you want to step into the stock now.

Doesn’t have anything in auto parts, but this is an area that he is going to be looking at. What is hurting this one in the short term is their exposure to Volkswagen and the great unknown as to how that is going to hurt them. This is going to create an opportunity, but he doesn’t have to own it right this minute.

Large auto parts manufacturer with a strong balance sheet. They made a German acquisition recently. They have a long history of raising their dividend. He is buying on any weakness. He does not think the auto cycle is over.

(A Top Pick July 7/15. Down 16.92%.) Have been tarred with the Volkswagen emission scandal and thinks that has been overdone. Then they had a bit of guidance that the market didn’t like. This is still in the top 20% of his valuation. He also has Shorts covering his holdings. A cheap stock.

There has been some weakness recently and it looks like there is some very good value at this point.

He sold and got MRE-T. It has better growth and is cheaper. He likes the group and would like this one under $60. Their last acquisition was not very accretive and pulled the price back.

Earnings disappointed the street and the stock went down, and it keeps going down. He doesn’t know why. When a company misses earnings expectations, momentum players get out the door, and the value guys have to pick up the pieces and wait around until they beat their earnings in one or two quarters down the road. This is a company with hundreds of plants around the world, the valuation is quite inexpensive and the company has delivered. If you own, he would continue to Hold. He is buying on this pullback.

Autos tend to benefit from the US consumer recovery and the middle class that is being built in emerging markets. The lowest risk way to play autos is a name like this which sells parts to most of the players. At these levels you want to be a buyer. Pays a decent dividend.

Bought this when it broke its neck line, but the stock dropped after its earnings report. There is a longer-term pattern that seems to be holding. There is a case for some support around the January lows of around $56. If it breaks below $56, he will sell his holdings.