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

Longer-term charts indicate this is still going higher. Typically people buy cars in the spring, so the auto sector does really well at that time of year until the beginning of May. After that seasonality tends to slow down. This stock is clearly in an upward trend and just broke through a new all-time high. It is outperforming the TSE composite and is well above its 20 day moving average. Technically you are in gear. You want to continue holding this as long as the technicals remain positive.

It is a good entry point. His view is that the global growth, which Magna is exposed to, will continue. Car sales will remain high. He sold it a year ago as he prefers MRE-T.

This has shown up in his screens as an attractive name to own. Had a bit of a dip recently, and unfortunately he did not pull the trigger, and it has moved up a little. Likes the name and thinks it will continue to do well. He doesn’t think we are very late in the game in terms of the auto cycle. (See Top Picks.)

It is a large cap, well recognized name with a lot of upward momentum. He expects earnings to increase significantly. Under a 10 times earnings multiple. There has been some positive earnings momentum.

He is still bullish on this. Thinks the auto cycle, both in the US and Europe, still has a long ways to go. During the recession years car and light truck sales fell from 16 million to 8 million in North America. That eventually turned around, but in Europe it hasn’t really turned around yet. This stock is still available at a pretty good price. It might be as cheap as 10X earnings right now.

You probably shouldn’t expect a more favourable price than where it is now. This is Canada’s leading component parts company in the auto industry. This will be an interesting long term hold.

Started buying in 2011. He is pleased with the performance. It hit a speed bump recently and it was a time to accumulate more. Earnings hit a wall because of currency. It has a good outlook going forward. Asian and especially China are the next areas of growth for them.

Some of the auto companies are starting to break out and do better. He thinks this one will pull back in and follow the sector.

A great company. Had a terrific run over the last couple of years. Not only has there been a real global story to auto sales in places like China, but the NA recovery has been a terrific story too. The only caution is that the company has gone through a re-lift of its multiple. It used to trade in a 7 or 8 times earnings, but is now trading at around 12.5 times. North American auto sales numbers are already high, so he doesn’t know if you are going to see huge growth going forward. For a cyclical recovery story, he would prefer US housing over the auto sector.

You have to be a little cautious with the auto sector. He would continue to own it, but prefers MRE-T.

Has had a huge run, but there is more to go. Still not expensive. Trading at 5.4 versus its five-year average of about 6. He models 22% free cash flow growth and 40% dividend growth. Europe hasn’t even started to really produce good results for them. You can pick away at these levels.

The auto sector looks very good and this would be in his top 3 positions. Although it is a Canadian company, you are buying a global business. There is opportunity for them to make acquisitions which could be game changers. They will benefit as Europe to improve.

An excellent company. The auto market has been doing very well and they have been a prime beneficiary, both in North America and Europe as things start to get better. A fine company and should continue to be.

When he looks at this and its valuations, it makes a lot of sense. He is positive on the auto sector, and this is a great way to participate without taking company specific risk. A wildcard for them at this point is what is going to happen in Europe. 40% of their revenues come from Europe. With commodity prices coming down, their revenues have grown. Dividend yield of 1.68%.

The auto cycle seems to have some real legs to it. The US economy is still dragging along. The average age of cars in the US has lengthened out. Sales have been good. The European side, with stimulation, should do okay. The company just continues to deliver. Can be a bit volatile.