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

On his list of names that he wanted to buy this week. Right at the 200 day moving average. The auto cycle is still moving along. The average car in the US is 12 years old, so it is certainly time for a refresh. That will bode well for companies like this.

Magna (MG-T) or Linamar (LNR-T)? This one is the market leader. It is in an uptrend and has corrected down to the trend line, probably a pretty great place to Buy it as long as a bounces. He never buys on the trend line; he waits for it to bounce.

Just sold his holdings recently because he didn’t like the action that he saw. There is support at $60 with the Volatility Stop at around $62. If the $60 level doesn’t hold, there are levels that are substantially lower that he would be looking at, at around $45.

The auto industry is doing really well, which translates into the auto parts companies. He is a value investor and this is not a value stock, but if you are a long term investor, it is hard to argue with its success.

Has been flying high because auto sales are at highs. The parts manufactures get an outsized move. He has another way to play it (see Top Picks). He does not get excited at these levels.

(A Top Pick April 16/15. Up 3.07%.) As the economy recovers, Europe eventually gets back on its feet and demand of middle-class growth in China continues, this is a way to play that sector. This gives a good dividend while you wait.

Stock vs. Stock. LNR-T vs. MG-T. MG-T is Canadian, but a global producer of auto parts and subassemblies. They have been very focused with their financial disciplines. Europe is getting better for them and they have opportunities to grow in Asia. They have lots of ability to take on debt if they choose to. He believes the auto cycle is not over. Asia could slow down, but Europe is growing. He likes both stocks.

Should the caller own Magna and Linamar? Based on his research the demand for auto parts is still pretty healthy. Cars still are old. May be a buying opportunity. Thinks it may turn around in September. Hold

Their European margins are expanding and they have a good platform for growth in the next few years. They have international exposure and they benefit from the falling Canadian dollar.

Comparing with Linamar. He was surprised that they went down today, because concistant strong sales in the auto sector and the American fleet is aging, along with low interest rates, means that the car companies are nowhere near their peak production.

He likes this as a company and he likes autos as a sector. Auto sales are quite robust and possibly somewhat frothy and possibly getting to a peak level. However, this company continues to execute. They recently bought a company in Germany. Cost was a little high, but given the good exposure to China, in 5 years that will be a good thing.

(A Top Pick May 14/15. Up 4.71%.) Is still quite pleased with this. A good performer. They recently did an acquisition of a German company, so they are using up a little bit of their cash hoard. It still rates very, very well. Relatively inexpensive.

Thinks the auto market globally is going to continue to grow. We have low interest rates, old car fleets and demand from emerging markets. Thinks the company made a shrewd acquisition in Europe to get exposure in Asia. Dividend yield of 1.56%.

Likes the auto parts business, a very good one to participate in the rebound and growth of the American economy. Prefers Martinrea (MRE-T) and Linamar (LNR-T). This one has always been a very mercurial stock.

Made an acquisition of a German transmission company, or just under $2 billion, and was a gap they were trying to fill. Thinks it has some good room to run. They are very big in Europe. European car sales in June jumped 15%. If you are patient, it is a very good long term hold.