Investment Q&A

Q: would you be a buyer of martinrea here. its seems incredibly cheap. also what would be the downside here. thanks.

Q: MRE & Nat Rae: later suing MRE saying the co. fudged results going back a ways? Who is Nat. Rae -holding company or what? I'd like to buy at some point maybe; but, would like to know what the current situation is and the facts concerning the law suit. Thank you...James

Q: Hi,

MRE dropped very heavily today. What should I do. Looks like capitulation.

Q: Hi,

I bought 1000 shares in MRE under 10 today. Do you think it is a good entry point. What are the risks of the lawsuit going against them?

Q: I bought into MRE at about $9.50 so I haven't lost much. Do you see it as a hold or let it go until the situation is resolved and how long do you think this will take? Thanks

Q: MRE: not a question but a comment. CIBC posted the following early on 22nd, which should explain today's drop. "Nat Rea Comes Out Swinging In His Defense To The Counterclaim
 In Nat Rea's reply and defense to the counterclaim issued by the MRE group, additional issues were raised that appear to be of greater materiality than the original statement of claim. Clearly, the Rea claim will weigh on the stock until a resolution, which will take months.
 One of the most impactful statements was that current CEO Nick Orlando and former CEO Fred Jaekel have collectively steered $50M to $100M out of MRE via kickbacks and misappropriations. For context, MRE reported EBIT of ~$450M from 2001 to Q3 2013. 2013 adj. EBIT est. is $158M.  MRE executives were also said to have overstated earnings of one of MRE's international plants in 2012 and early 2013. In early 2013, several million
dollars were said to be booked retroactively to 2012, with the plant
subsequently instructed to book periodic losses in 2013 to offset the profits.
 These new claims are troubling and given the internal detail only MRE can
put them to rest. Our view remains that we like MRE's fundamentals (better
margins and exposure to light weighting). The timing of realizing this value
has been pushed out which will cap its valuation (2014 P/E 8x, peers 11x+)."

Q: Mre has dropped over 11 percent plus yesterdays decline.Whats UP????? Thanks Don

Q: MRE seems to have fallen off a cliff.Do you have any idea why? Your answers are always very helpful and I thank you.
Garry

Q: Hi 5i team,

Any thoughts on the recent decline in Martinrea? The Q3 results seemed pretty solid and the stock had a bit of a run up, but is back down to it's pre-results price. Wondering if it's worth holding this one for the long-term or would you recommend switching into Linamar?

Thanks as always,

Q: Could I please have your comments on MRE third quarter numbers released today.
Thank You
Garry

Q: I have a question about Magna International Inc.

I am very happy with Magna, but have additional funds to invest in the auto sector. With MRE down because of the court challenge, would this be a better investment than putting more into MG? Do you see the law suit being a significant problem for MRE?

Q: Hi 5i team,

Do you think MRE is being oversold on the news released today.

Thanks

Q: Hi Team, I would like your input on MRE's last results, and your up to date comments on the company, also is this a good long term hold?. Love your services...keep up the great work!

Q: Would now be a good time to add to MRE.....on the dip.

thanks

Carl

Q: Peter: You mention Magna as a growth manufacturing stock that might be worth using to offset dividend funds in a portfolio. What do you think about Martinrea instead? I believe that it is cheaper.

Q: Hello:
Re: this Stock MRE
It seems to be going up despite the market pull back
It does not paid a dividend
Do you think it is a good investment for a 2-3 years hold?

Thanks

Q: On May 2 Martinrea (MRE-TSX) reported good earnings and the introduction of a dividend. What is your opinion on this stock? Due to the bounce in stock price I could take some modest profits or do you see more up side in this stock?

Thanks.

Thanks.

Q: Hi, I bought a small position (1.5%) in Martinrea at 8.90$ and have watched it slowly drift all the way down to below 8$/share since their last earnings were reported. While I have not yet ever averaged down I find myself tempted to add some more given my still positive view on the company as a long term hold in my rsp. Any advice on this situation would be appreciated. By the way I also have a 5% position in magna. thanks

Q: MRE
I wish to get your opinion on MRE Q4. LNR also missed recently. AM was OK. MG missed but was positive on outlook so went higher.
Scotia says:
■ MRE reported Q4/12 adjusted EPS of $0.15 (excluding $0.23 in severance costs, restructuring charges, and customer chargebacks), which was below our estimate of $0.19
and consensus of $0.17.
Implications
■ The miss vs. our forecast was on sales (largely North America). D&A was also higher than we expected, resulting in a lower gross margin (including D&A) vs. our forecast. The miss
vs. consensus was on margins, partially offset by better-than-expected sales.
■ Q1/13 guidance a bit light. MRE expects sales (excluding tooling) of $700M-$720M and EPS of $0.22-$0.26. This compares to our estimates of $782M and $0.26, respectively. Q1/13 consensus EPS is $0.25.
■ Operational update. Shelbyville is experiencing improved throughput with less overhead and labour. The facility was profitable in February and cash flow positive in January.
Continued operating improvements are expected. Hopkinsville is improving but not yet profitable.
■ Our take. We are encouraged that operations in Kentucky are improving. Overall, we do not anticipate material changes to our investment thesis.

Q: In regards to the upturn in car sales question on Dec 26, what is your opinion on MRE related to the other auto parts stocks mentioned in that post? Thanks!