TSE:MRE

Martinrea (MRE.TO)

10.37
-0.55 (5.00%)
as of Jun 10, 2026, 7:54:30 pm Market Open.
187 watching
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COMMENT
Poor performance due to supply chain and chip shortages. Earnings have been hit hard. Valuation is low and might present buying opportunity. Positioned well for electric vehicle + combustion engine manufacturing.
DON'T BUY
MRE vs. LNR vs. MG A bit of a dilemma. All being hit by supply shortages. Earnings ticking down, so PE's are at the higher range. In terms of ROE, MG would be the most profitable. MRE's is quite a bit less, though the multiple is also less. MRE is 0.8 price to book, PE of 9.8. His choice is LNR: it's in the middle of the pack, price to book is just over 1, PE is 10, and ROE tends to be more over time.
DON'T BUY
MRE vs. MG MG is one of the top two companies in the world, with lots of technology in the car. MRE is smaller, hit hard by pandemic. Working on a new technology, but it's at early stages and expensive. Needs to show some of its problems are behind it. Go with MG.
TOP PICK
Auto sector looks incredibly cheap. Trading under 3x operating cashflow. Well positioned when the industry turns around. Yield is 1.90%. (Analysts’ price target is $16.00)
TOP PICK
Its valuation is cheaper than the rest and has under-performed this year. They are involved in the light-weighting of vehicles. Three times operating cash flow. The cycle will turn – the demand is still there. He likes the insider buying recently. (Analysts’ price target is $18.06)
PARTIAL BUY
Magna vs. Martinrea Supply chain constraints have hit hard the carmakers and car-parts makers. We likely will see lower-than-expected volumes for another year. US-China squabbles will also have an ongoing effect. Longer-term, MG is a partial buying opportunity. He hasn't looked closely at the car parts makers though to choose one over the other. He owns Linamar. Expect volatility in this space.
COMMENT
There is a lot of demand for vehicles and there are new and used car inflation. There are some cyclical earnings growth here in MRE. Would probably opt for Magna, since it is more diversified. Thinks the whole sector is poised for long term growth.
WEAK BUY

The transition to EVs for Magna vs. MRE. He likes the auto sector, but prefers Magna because it has European and Japanese exposure. Also, they are diverse in products, and have enough cash to invest in EV technologies, like trying to buy a car-related AI company. MRE is good, but not his first choice.

PAST TOP PICK
(A Top Pick Oct 13/20, Up 13%) The auto sector boomed late last year. This chip shortage has hurt the entire industry. It'll be on going for a while. MRE-T is into the light weighting of vehicles and three to four times operating cash flow and is generating free cash flow. He loves the story.
TOP PICK
The valuation sticks out as just too cheap. There is a huge backlog going forward. Moving toward electric vehicles, parts companies will do very well. They also invested in a vehicle battery company. (Analysts’ price target is $18.12)
PAST TOP PICK
(A Top Pick Sep 03/20, Up 23%) He's adding to it. Auto parts producers under pressure, mainly because of the chip shortage. Lightweighting of vehicles by using aluminum. Significant insider buying. Into EV batteries. Well positioned going forward.
TOP PICK
Ticks the boxes for him. Cheap valuation at 10-12x forward earnings. Auto parts companies will do well as we move to EVs. These guys can pivot. Focused on aluminum for lightweighting, so there's growth there. Investing in EV batteries. Insider buying. Yield is 1.62%. (Analysts’ price target is $18.79)
TOP PICK
The valuation is cheap and insiders are buying. 3-4x operating cash, 10-12x earnings. Auto sales are doing well and this company helps in making vehicles lighter with aluminum. Also working on using graphene for electric vehicles. A good way to play EV without paying a high multiple. (Analysts’ price target is $18.79)
TOP PICK
He likes the positioning. The electrical vehicle market will grow over the next number of years and this year can reposition itself better than a number of the majors in the US. There has been some huge insider buying recently. This is the cheapest in the group. (Analysts’ price target is $19.19)
PAST TOP PICK
(A Top Pick Apr 13/20, Up 75%) Bigger risk, bigger reward. Valuation was so depressed at the time and is still cheap. Has been buying it recently. Chip shortage has hurt them all. Well positioned for the EV market.
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