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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: How much of a threat, mid to longer-term, do you feel the following will pose for Magna? First, sharing services Uber and Lyft, and second, developed country younger generation's disinclination for purchasing cars. Will higher demand for vehicles in developing countries outweigh the above, and is Magna well positioned to continue to do well as a Tier 1 supplier to the industry? Thank you. Ted
Read Answer Asked by Edward on January 13, 2016
Q: Dear 5i
I'm considering investing in the auto sector but am having a tough time deciding on which one of these three ...mg , lnr or xtc . I currently own bos and will likely be topping up it shortly but I wasn't sure if it belonged to the same sector . Acq is also down significantly and thought this might be the the time for a half position as well . Which of these stocks would you favour at this time ?
Thanks
Bill C.
Read Answer Asked by Bill on October 08, 2015
Q: In a recent report by Veritas they feel LNR has significantly more upside than MG.

I currently own MG do you think it is worth selling and substitute LNR. Here are Veritas's comments:

Linamar (LNR) - $69.41 – Veritas: Buy (PT $97); RBC CM: Sector Perform (PT $91)
Magna International (MG) - $62.34 – Veritas: Buy (PT $62.70); RBC CM: Outperform (PT $68)
The company now warns that the current emission issue could impact roughly 11 million vehicles (some models from 2009- 2015). In prior recall related events (i.e. GM, Hyundai, and Toyota), the ultimate loss of market share was largely short-term in nature. As a result, Vertias suspects that the fallout of VW’s emissions-gate could be short lived, with VW losing less than 25% of its U.S. sales. Between Linamar and Magna, the auto-parts supplier we cover, Linamar has less exposure to VW. In 2014, VW was not among LNR’s top four customers (suggesting VW contributes less than 7% of LNR revenue); in case of Magna, VW contributed roughly 11% of MGA’s 2014 revenues. Between Linamar and Magna, Linamar has less exposure to VW. Thus, for anyone who is looking to invest in a mid-cap autoparts supplier, Veritas recommends buying LNR. That said, given the diversified customer base Magna has, Veritas believe that the impact of VW event will be minimal, as VW lost business will be picked by other OEMs.
Read Answer Asked by Sheldon on September 24, 2015
Q: Volkswagen said that they installed software programmed to switch engines to a cleaner mode during official emissions testing. Since Magna makes parts for them, it probably explains why the stock is down 8%. Do you or a member know if Magna develops anything involved with the engine or software that controls it? If not, how about Linamar or MartinRea?
Read Answer Asked by Matt on September 22, 2015
Q: Hi, Magna's recent acquisition in Germany has received praise from most analysts. However, stock price appears to languish and trade even below the level stock was trading before this announcement ($72).There was also huge volatility/trading, on first two days after this news ( high of $74.50 and low of $68.50).I started a position in Magna recently and would appreciate your comments. Thanks
Read Answer Asked by rajeev on July 27, 2015
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