Martinrea (MRE.TO)

Auto stocks and auto parts stocks have a tendency to reach a very important seasonal low at the end of February. Has very strong seasonal tendencies right through until the middle of May. Watch for technical signs of the stock bottoming and look for an entry point within the next 2 or 3 weeks.

Been lightening up on this but still has a big position. Had a great move and auto sector has done exceptionally well. Risk is in the European business. This one is positioned well. This is still historically very cheap.

Auto production in general. Adding on plants in US. Europe is a whole different story. This one should do well. Could be profit taking in near term.

Tier 1 automotive parts supplier. Lagged last year and was unfairly punished because of their many start up costs going into new car models. Long-term outlook is that the revenue has gone up and once they get through the start-up phase with some of the new programs, their capacity utilization is going to go up, revenues are going to continue to climb and earnings are going to go higher. PE of 11.5%. EPS of $.78. Worth at least $12 a share.

Would switch into TRW. Automotive is a good place to be right now. They supply to OEMs. Is very volatile, difficult to hedge. Under levered balance sheet. A large position for him.

(A Top Pick Dec 17/12. Up 10.84%.) Still likes.

They make the Ford Escape there. Getting pressure to work the plant 7 days a week. Less than 7 times next year’s earnings. Attractive time to buy. Look past short term issues. Could start a dividend. Cars are really old and there is that recycle rate.

(Top Pick Jan 13/12, Down 12.61%) Over promised and under delivered. Soft Quarter. All ramped up for the automobile turnaround. Average time on the road is 11 years. Thinks they have passed the worst of it. 50% Canada 50% US. Dividend 6%.

Dirt cheap and the auto industry is recovering. People are worried about their acquisition last year and a couple of their plants that are running at extremely low capacity and about earnings problems over the next few quarters. Trading around 6X current annualized earnings. Have a big platform with this new Ford Escape that is coming out. Could easily see it back at $10-$12.

(Market Call Minute.) Car cycle is very interesting and is stacked up to do well longer-term. If you can get it at $7 with a 2 year time horizon you should be fine.

Likes the auto sector in general. It had a good recovery here. This company is much cheaper than its competitors. Starting to get a few more platforms from Ford (F-N). Have recently done acquisitions. Margins are on the verge of improving. Extremely cheap at 7X earnings.