(A Top Pick Jan 18/18, Down 6%) Nothing has really shaken his conviction on it. Price momentum has been the knock on it recently. It is really cheap and a best in class auto parts company. 23% return on equity. They have a solid balance sheet. They are right as an activist target. He likes it. It is a solid holding.

The auto cycle will be challenged for a while, and it's going through massive change with e-cars. This will reduce the capacity of existing car parts plants or close some of them down. These are serious storm clouds on the horizon.

Well-run though cyclical. MG says that if car sales remain flat for the next three years, MG will generate of 35% of current market cap in free cash flow (after paying dividends). They will continue to buy back stock. They've doubled the dividend. Cheap valuation. (Analysts’ price target is $78.30)

The December period was bad in that the bottom fell out. We have electrification and lots of other things happen in the next decade. He would let it try to rally for you and sell into strength.

LNR-T vs. MG-T. MG-T is the third largest global auto parts manufacturer on the planet and so are very dependent on the growth of autos. He thinks worries about ride-share taking over and reducing auto ownership are over grown. LNR-T is concentrated within the drive-train of the vehicle. They are capturing market share globally and own the industry in North America. Electric vehicles will have no gears in them, but LNR-T will build drive trains for electric autos. They also own two other businesses: Skyjack, and a farm machinery business they acquired last year. LNR-T can grow faster when the businesses are booming, but MG-T has less debt.

All car stocks are now very cheap. Investors are nervous over Europe; Magna is 40% European. This is well-managed. He'd rather own the car parts makers than the auto-makers. Good entry points for the entire group. He's owned Magna in the past, but finds Linamar cheaper. Parts-makers are trading at super-low 4x earnings.

He flip-flops between this and Linamar (which he currently owns). Uber is disruptive so investors don't know how the car market will look in five years. Also China's auto sales have declined for the first time in a long time. But the earnings are so cheap, around 8x P/E, that the stock looks attractive. MG can outgrow currents problems and give investors a nice return. There are still long-term opportunities to grow.

She doesn't own this sector because of concerns (peak auto, tariffs, GM closings). But if she were to buy this sector, this would be her choice, because they have a global presence, especially Europe where they can improve their margins.