Q: Do you think now would be a good time to start a position in magna?
5i Research Answer:
MG is a cyclical business that depends on the OEM cycle. Although the share price has already priced in a slowdown in the industry somewhat. The degree of the current downturn is hard to predict which could be more prolonged and worse than investors expect. That said, MG is trading at 8.7x earnings which is at the lower end of historical averages in the last few years that range from 7.8x to 13.1x. We are okay to start buying some at current levels, if an investor has a long term view.