Martinrea (MRE.TO)

This tends to benefit in the run-up to spring automobile buying season. The period of seasonal strength runs from about the middle of December all the way through to May. This certainly played out in 2015. Chart is showing what looks to be consolidation. It is holding quite closely to some of its major moving averages. The market is down significantly, but this stock is not down by much. If it can move above its 50 day moving average, we could see a substantial rise through the period of seasonal strength ahead, which has been quite consistent. If it breaks below $10, he would consider the trend to be violated.

(Top Pick Dec 19/14, Up 8.58%) He still owns it and still likes it. It pulled up in the last few months because of the cyclicality of the sector. He refresh cycle in autos got so long that he thinks there is perhaps still more room in the sector for growth.

(Top Pick Dec 19/14, Up 13%) They have some of the best exposure to the increased use of aluminum in the auto industry.

Read a very good research report from a very good analyst. It made a compelling argument on margin expansion. In this kind of a market, at 9-10 times earnings it is going to turn heads. Cheap. Dividend yield of 1.12%.

There have been a lot of sales cars for a couple of years now. Thinks excess inventory has now been burned off. This is very capital intensive, and you don’t need to be involved in the car business right now. A very cyclical business.

Has been an underperformer in the auto group. The sector is interesting to him. Unit sales are very strong in the US. The suppliers into the auto industry have had more success to do with improving the drive train. He prefers MG-T. MRE-T has good growth in earnings, but it is very specifically focused on the metal components. He prefers MT-T.

Auto sales in the US have been on a really solid trend. The auto sector has a really distinct period, from February into April. He would let this settle down a little because of the definite seasonal trend this goes through. If it drops down to $10 that would probably be a good time to pick it up.

Valuation, positioning in Europe and their use of Aluminum all benefit them. They are doing a great job of a turn around.

It has struggled relative to LNR-T and MG-T. There are still a few more legs in the parts manufactures of the auto industry. The OEMs are in the 9^th inning however. This one you could pick away at. Their exposure to VW is somewhat limited. He thinks you still have 6 months in the auto parts manufacturers.

This is a fine holding. The 3^rd in auto parts companies in size. Have had a colourful board and executive over the last few years. There have been some legal issues that came out. It has also tended to underperform with the lowest net margins compared to the other 2. He would prefer Linamar (LNR-T) or Magna (MG-T).

He quite likes it. It had a nice little pullback recently. They are a leader in Aluminum and some other areas. He thinks it is going higher.

This is a bit of a controversial name in the auto parts sector. There have been some issues of management turnover in the past, but thinks the outlook for the overall North American auto industry is very good. This company is benefiting from that. They made an acquisition in Europe a few years ago. Trades at a lower multiple than some of its peers, and thinks it is a pretty good play here.

He prefers MG-T, MRE-T is a specialized company. Margins are stronger in LNR-T and strength is in MG-T as a global company.

Give it time. It will work itself higher. They are delivering the numbers and meeting expectations. Recent earnings were used to pay down debt. He thinks it will go higher.

A good Canadian company, but sell a lot into the US, which is a great time with the Cdn$ being low, and he expects going lower. They seem to have sorted out some of their internal problems. A volatile stock and you have to believe that the auto industry has a few more years to run. The average age of cars and trucks in the US is over 11 years. This should do well, but you have to realize this is a cyclical industry and this one has shown some wild swings over time. If you have made 10%-20%, it might be time to take some profits.