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

Anybody who has significant Europe exposure is facing big headwinds. He is sitting on the 1 yard line. He prefers parts makers to manufacturers.

What caught his attention was the recent selloff. Market started selling off and Ford (F-N) had some negative news as well as some investigation into some of the Brazilian operations. Brazil is a small part of their business and the automobile volumes are still robust. This is a world-class business. Dividend yield of 1.55%.

Owned until recently. This one had run so much that he took profits. It has weakened since. If it went under $100 he would buy it back. The auto cycle is not over.

Went through a big overhaul over the last 5 years. They renewed a commitment to steadily increase the dividend. Came back a bit recently and he is watching for an entry point.

The outlook for auto sales is good. The stocks were priced for perfection and are now leading the market down. Wait until it bottoms. Take some profits if you are short term.

Didn’t buy because it was too high. The company is doing everything they should be doing. International operation is doing well. Consumer confidence in the auto sector is at a 15 year high. Great support at $107. See Top Picks also.

He is not bullish in the auto sector. It has run its course. It violated its up-trend line. The question is if it will rally up above the trend line. He compared to AN-N, which is correcting further. He would be very careful with the auto sector.

This looks pretty good. He would love to see the stock back to about $105-$107, because it would be a tremendous opportunity to buy it cheaply. His FMV measurement is $106.

The car industry has a long way to go. The age of inventory is still on the high side. This is a great story going forward. Facing antitrust proceedings in Brazil and Germany. The worst that can happen is a $1 a share.

The Brazilian antitrust authorities are investigating this company’s operations. Their entire sales in South America are 8% of their global sales. He can’t imagine that the investigation is enough that it could imperil their entire operations in Brazil. Feels the global auto industry is still in an uptrend and still 4 or 5 years still to go before the North American fleet is replenished.

Really likes this. Stock dropped because of a Brazilian issue. When you have a stock specific reason, you could probably wait until the dust clears. He likes this because of the resurgence in the North American auto production.

The earnings have doubled or tripled in the last 3 years, so it doesn’t matter that the valuation has done the same. Generating lots of positive free cash flow. Opportunities are in emerging markets. Look at the value, not the price.

Don’t buy more at current levels. Likes the auto replacement story. People were deferring auto purchases after the financial crisis. Likes the balance sheet and they have a pile of cash for potential acquisitions.

Be on the sidelines in the auto industry right now. Lots of European exposure which concerns him. You have to step back and say there is probably not a lot of upside in this sector.

(Market Call Minute.) Sold his holdings recently because it had been a triple for him. He has Martinrea (MRE-T), a smaller version, and he thinks there is way more catch-up in it.