Bruce Murray Magna International MGA-N PAST TOP PICK May 30, 2018

Recent bad news tough on stock.
Has owned shares in the past, but not currently.
Very bearish on the auto sector.
Electric vehicle very disruptive on sector (top down government policy).
Wait until sector become better run. 

Owns shares in Canadian dividend fund.
Share price appreciating after Covid-19.
Recession fears weighing on share price.
Believes is a good long term investment.
Excellent value at current share price.

Likes it here. Auto companies will depend more on outsourcing parts, especially with the labour settlements we're seeing. In a good position over the next few years. Tight margins will continue for a little while. Dominant player.

Owns shares in company. Has been buying shares on weakness. Cost containment efforts ahead of schedule. Improving trends in costs. Would recommend buying. Expecting 90% growth rate. Believes company will benefit from soft landing. 

Owns shares, and would recommend buying. Can have strong moves in positive direction due to cyclical nature of business. Would recommend buying around $70. Expecting shares to rise to $100. 

Too early to buy shares in business. Expecting further weakness. Wait for shares to hit rock bottom before buying. Strong brand name with history of strong execution. 

Growth has slowed down and profitability has been sliding since 2018. Its valuation of 7X forward earnings reflects a lot of these concerns, and it trades just above book value at 1.1X price to book. Cash flows are mostly used to pay its dividend, and it has been a net issuer of debt over the past two years. We do not like its recent momentum, following a string of weak earnings results. We would prefer to wait until next earnings to assess if a floor can be put into its price, but for now the cheap valuation could become even cheaper if results continue to disappoint. 
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Under valued given current stock price. Expecting stronger sales ahead. Auto part sector not favorable right now, but is a good time to buy. Car business presents many customers with aging auto fleet in North America (will require replacement parts). Expecting earnings to rise, especially with EV opportunity. 

Tariffs are impacted them, but the auto parts sector is already out of favour. EV sales have levelled off. Magna lower their guidance again and again last year. They're nearing a bottom now. Prefers Linamar for its much lower EV of 6x, and they have diverse businesses, like agricultural equipment.

Wells Fargo raised its target price on the stock recently, and the stock has seen some technical moves. Sentiment has shifted towards less concern on tariffs and investor anticipation of lower interest rates ahead. The stock is still down 7% YTD, but very cheap on valuation, and we think it was just 'beaten up' too much earlier this year. Consensus calls for a nice EPS recovery in 2026.
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