Tesla has made cars sexy again. The auto industry is in the
middle of a renaissance, and that includes the auto parts suppliers
Magna International Inc.
). This Zacks Rank #1 (Strong Buy) has surprised on the Zacks
Consensus Estimate 7 quarters in a row.
Magna is based in Ontario, Canada and has 315 manufacturing
operations in 29 countries. Its customers encompass nearly every
auto company in the world. It produces body, chassis, interiors,
exteriors, seating, powertrain, electronics, mirrors, closures and
Record Q2 Sales
On Aug 8, Magna reported second quarter earnings and beat the Zacks
Consensus by 11.3%. Sales jumped 16% to a record $8.96 billion.
This was better than vehicle production which rose 7% in North
America and fell 1% in Europe.
Complete vehicle assembly sales jumped 23% to $796 million compared
to $645 million last year.
Raised Full Year Sales Guidance
The auto supplier is optimistic about North American production. It
gave 2013 guidance of 16.1 million vehicles.
It also raised full year revenue guidance to the range of $33.3
billion to $34.7 billion from its previous guidance of $32.6
billion to $34 billion.
Zacks Consensus Estimates for 2013 and 2014 Move
Magna didn't give EPS guidance but that didn't stop the analysts
from raising their estimates for both 2013 and 2014 after the big
8 out of 10 estimates have moved higher for 2013 since the report,
pushing the Zacks Consensus Estimate up to $6.14 from $5.96.
Similarly, analysts expect the good times to keep rolling in 2014,
as 9 out of 10 estimates have been raised for 2014 in the previous
30 days. The 2014 Zacks Consensus jumped to $7.38 from $7.11 in
that time. That is earnings growth of 20.1%.
Shares Near 5-Year Highs But...
Shares have soared over the last year and are now hovering near 5
But valuations are still very attractive. Magna is trading with a
forward P/E of just 12.4 which is well under the S&P 500
average of 15.5. It has a price-to-book ratio of just 1.9, which
puts it in value territory.
Magna also has a price-to-sales ratio of just 0.5. A P/S ratio
under 1.0 usually indicates value.
Investors looking for a hot industry, earnings growth and value
can't go wrong with this auto supplier.
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MAGNA INTL CL A (MGA): Free Stock Analysis
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