Linamar Corp

LNR-T

Was a $85 stock and now it is $45. They make car components and everybody hates car components. P/E is 5 times earnings. They have a big plant in China that is running at half capacity only. But they have products to go forward. He has been following this company since it came public in 1986. Very well managed. Buy it and put it away. (Analysts’ price target is $61.50)

Price is discounting a large recession. Trading at 5x 2019 expected earnings. Revenues and earnings are still expected to be positive this year. Also in aerial lifts and agriculture. More diversified than Magna. Yield is 1.06%. (Analysts’ price target is $61.50)

It is so cheap at these levels. It has a decent balance sheet, but trades at 5 times earnings. The problem is auto sales are heading lower globally, he thinks. If you have patience sit tight, but he is loath to get in front of a freight train coming out of the tunnel -- lots of light, but don't get run over.

It is pretty reasonably priced today. More of the automotive parts business is outsourced and LNR-T benefits. They have an advantage in the high precision parts they make. He owns it personally and has no intention to sell.

(A Top Pick May 30/18, Down 23%) He still owns it and is looking for $80s/90s in the next 3 to 5 years. There is a move to 9-10 speed transmissions from 4-5 speed for improved gas mileage and this gives them a higher content in cars. It is a great company with an incredible future.

He's long owned this and likes it. Are we in peak auto now? Car stocks have come off--and that's overdone. Markets are growing rapidly, though China is making its own auto parts. That said, this space and stock are safe for now.

He is concerned that this company can be disrupted along with the space. The debt level of the company is a little higher than the one he is comfortable with. The company is doing the right things, but if the industry in general shrinks it will be affected.

There are all kinds of good things about this company. After NAFTA was agreed upon the stock has gone down. Issues in Europe should have been short term. It is perceived as the smaller of the auto parts companies. But it should be viewed as a metallics manufacture. They make products for oil and gas, aerial lifts and agriculture. They are reporting after market close today.

He is staying with it. Revenues and earnings have doubled in the last 5 years but the stock is back to where it was 5 years ago. The multiple has shrunk. The CEO just bought 50,000 shares. (Analysts’ price target is $58.25)

Wait till they report on Monday, especially given that GM exited Oshawa. The auto sector still doesn't know what's going to happen to the new NAFTA until iron and aluminum tariffs come off. It could take a month or two, but wait.

You need to own Magna or Linamar, cheap names. Yes, they're cyclical and there's talk of auto sales rolling over and e-cars, but he doesn't believe those fears. These companies continue to put up impressive numbers and are still growing 5% on the topline. They're well-run and diversified. He's not worried about this sector. Insiders are buying their own stocks. Linamar has a great CEO.

She thinks the auto sector in the US has peaked. The space is trading at low multiples, but this is normal based on the cyclical nature of the sector.

(A Top Pick Mar 20/18, Down 33%) He has owned it since it went public. It has had a lot of ups and downs but is an incredibly well managed company. They have lift access as well as farm machinery businesses in addition to auto parts. He would not hesitate to buy it.

He thinks the market is telling you the car market cycle is coming to an end. The move to electric vehicles and car production not likely ever making new highs worries him. It has about 100% upside in value, but he cautious of the cycle nature. He would be careful.

NAFTA 2.0 will benefit Linamar. Its industrial side is doing well. Extremely cheap, and is going to earn some crazy earnings like $8 EPS.