Linamar Corp (LNR-T)

Sideways trading range, as have US auto parts. Nothing too exciting, unless perhaps as a value play. On the sidelines.

Believes is a good time to buy auto part manufactures due to all time low sentiment. Current share price is a bargain price given fundamentals. Not just auto part maker with agriculture exposure, and other parts of the economy. Leadership very strong, and is grown organically. Would recommend investing, and holding for the long term. 

See comments on Martinrea, similar. Consumer spending will be weak and inventory will climb in the car sector, but LNR has an industrial business, so it's not totally in auto sales. LNR is cheap but faces earnings headwinds in the short term.

Is very cyclical. See comments about Martinrea.

Starting to look attractive at these beaten-up prices. Not just EVs. Broad-based repertoire of products, including industrial scissor lifts, which will attract demand if economy continues to be resilient. Warrants a look.

It is in a long term uptrend but has volatility. There might be a buying opportunity but it is best to do it in legs: 1/3 at the support level, another third if it holds , etc. This is called legging in. He is not trading it now.

The high-end electronic Mercedes has an LNR electronic axle. Trades at 6x earnings. SkyJack is a dominant global business, opening plants in China and Mexico. Expansion possibilities, especially in EMs. Diversified. Company projects 10-15% earnings growth for the next several years. Will probably do a big share buyback. Yield is 1.62%.

New CEO has been at the company 30 years. He gives straightforward answers and knows his stuff.

Car parts hasn't done well as a sector. Its PE of 6x is cheap, but cheap for a reason.

About half profits come from non-auto businesses such as Skyjack and agricultural equipment. Auto parts are still under-earning from historical norms. 

Market gives a higher multiple to industrial manufacturers than auto parts. So as it becomes more diversified, potential for multiple expansion. He likes the diversification. If it continues to grow the fundamentals, the stock will eventually follow. Yield is 1.5%.

For comparison, MG trades at 7.4x 2024 expected earnings, despite missing expectations and giving weak guidance, and the stock came off. Whereas LNR beat expectations, raised guidance, yet trades at 6.5x.

It beat expectations last week. It has had solid organic growth as well as acquisitions. It also saw improvements in margins. Despite a pop in share price, it is trading at 7X this year's expected earnings. The industrial side is doing well and the parts side is turning the corner.  
Buy 5  Hold 1  Sell 0

EPS of $1.98 beat estimates of $1.74; revenue of $2.45B was 3% ahead of estimates. The dividend was raised 13.6%. Most divisions saw market share gains. Sales rose 19% and profit rose 23%. LNR expects 'double digit' growth this year and commentary was positive. Things look solid here. 
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Better off owning suppliers than car companies, which are caught trying to straddle combustion and EVs. Prominent Canadian company. MG can take advantage of its size, LNR is really well run. LNR is his choice for the long run, more nimble.

He tends to not own this type of highly cyclical business.

It manufactures car parts and now is not the time for this because of the possibility of a recession. It is highly cyclical so it could be considered a trading stock but not a long term holding.

Has owned this many years. LNR is well-positioned with plants in North America and Europe. The CEO has done an excellent job steering the company.

Alternative to Tesla in EV revolution. Has been following since 1986 when company went public. Very strong engineering talent within company. Demand for cars expected to grow generally speaking. Currently trading at 7x earning. Believes shares are very undervalued.