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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: 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: At the present time there seems to be a bottleneck in the TPP deal
with respect to auto and auto parts manufacturers.Between MG and LNR,which one is less likely to be impacted if a TPP deal reduces
the the minimum percentage of auto parts required in cars
manufactured in the U.S.,Canada, and Mexico as outlined under NAFTA? Thanks, Joe
Read Answer Asked by Joseph on September 14, 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
Q: What's happening with Magna? The stock has been in steady day-by-day decline for the past 2 weeks and lost 10%. I am surprised that the sale of interiors unit has such effect on the stock... US economy is booming and people are buying new cars, I'd expect MG to do well in such environment...? Is your rating/views of MG still unchanged since your report 2 months ago?
Read Answer Asked by Michael on April 30, 2015
Q: Hello Peter & Team,

Have noticed both are off recently - MRE about 9% in a month & MG about 10% in the past couple of weeks.

Also noticed Auto sales have been reporting a little weaker than expected domestically but while internationally has been a little more promising.

Do you think this is the reason? or is there something else at work here driving these down? I got out of MG shortly after the split but still hold MRE at just under $10. Would you recommend I hold tight or take my profit - it's May so go away?

Thanks for all you do

Gord
Read Answer Asked by Gord on April 30, 2015
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