MGA

Magna International Inc

Industrial/Transportation


Presented:01/21/2016
Price:$34.49
Cap:$14.27B
Current Price:$41.03
Cap:$11.79B

Presented

Date01/21/2016
Price$34.49
Market Cap$14.27B
Ent Value$19.39B
P/E Ratio7.08x
Book Value$21.87
Div Yield2.55%
Shares O/S413.80M
Ave Daily Vol2,177,461
Short Int0.27%

Current

Price$41.03
Market Cap$11.79B
Magna International, Inc. designs, develops and manufactures automotive systems, assemblies, modules and components, and engineers and assembles complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks in North America, Europe, Asia, South America and Africa. Its capabilities include producing body, chassis, interior, exterior, seating, powertrain, electronic, vision, closure and roof systems and modules, as well as complete vehicle engineering and contract manufacturing. Magna International was founded by Frank Stronach in 1957 and is headquartered in Aurora, Canada.

Publicly traded companies mentioned herein: Apple Inc (AAPL), Ford Motor Company (F), Magna International Inc (MGA / MG CN)

Highlights

The presenter is long shares of global auto supplier Magna International (MGA) and believes the recent selloff (down ~25% last year, and ~15% year-to-date) represents a buying opportunity. MGA generates ~$40 billion in annual revenue and counts all the major automotive OEMs as customers. Parts supplied include everything from seats and mirrors to the power train. In addition to concerns about the sustainability of SAAR at ~18 million, MGA faced FX headwinds in 2015 and had some operational issues during the 3rd quarter of 2015 in North America (capacity constraints related to new launches) that hurt margins. The presenter’s view is that the issues are transitory and will be in the rear view mirror by the end of 2016. At just under 7x this year’s Street EPS estimate, shares are “way too cheap.”

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Idea Discussion

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