On Oct 18, 2013, we upgraded
Magna International Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Magna International generated positive earnings surprise in
the last 4 quarters with an average beat of 17.84%. Earnings per
share of the company reached a record high of $1.78 in the second
quarter of 2013, driven by higher net income and lower share
Even revenues reached a record high of $8.96 billion on higher
global sales. Moreover, the current revenue guidance of
$33.3-$34.7 billion, if achieved, will imply record high annual
revenues for Magna International in 2013.
Following the release of second-quarter earnings, the Zacks
Consensus Estimate for Magna International's 2013 earnings per
share increased 1.14% to $6.21, up 7.22% over 2012. Even the
estimate for 2014 improved 1.36% to $7.48, up 20.43% over the
The rising earnings of Magna International are boosting its
cash flows, which in turn facilitates regular capital deployment.
As a result, the company declared a 16% hike in the quarterly
dividend to 32 cents per share earlier this year.
In the long run, stricter regulation formulated by the U.S.
government to curb emissions will stir up demand for auto parts
and other fuel efficient components for trucks. The new emission
standards will be implemented from 2014 followed by more
stringent requirements in 2017.
Other Stocks to Consider
Other companies worth considering in the original auto and
truck business are
TRW Automotive Holdings Corp.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
DENSO CORP (DNZOY): Get Free Report
GENTEX CORP (GNTX): Free Stock Analysis
MAGNA INTL CL A (MGA): Free Stock Analysis
TRW AUTOMTV HLD (TRW): Free Stock Analysis
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