Category Archives: Foreign Stocks

MAGNA

Ticker: MGA, Buy below $50.

Magna International is leading global automotive supplier.

Why I Would Buy

  1. Cheap – Magna trades at < 8x earnings.
  2. Reducing Sharecount – Magna is aggressively buying back stock.   
  3.  Low Payout – The dividend payout ratio is below 20%, while the yield is 3% +.
  4. High ROE – Return on Equity > 10% for past few years.
  5. Low Debt – Debt to Equity is just 30%.

What Could Go Wrong

  1. Trade War – Trade War with China is weighing the stock down.
  2. Cyclicality – Automobiles are a cyclical industry which is possibly at it’s peak right now.

Disclosure: I am long MGA, please read additional disclosures here before taking any action based on this post.

CK Asset Holdings

Ticker: CHKGF, Buy below $15.

CK Asset Holdings is an real-estate and infrastructure assets focused holding company based in Hong Kong .

Why I Would Buy

  1. Low Earnings Multiple – CK Asset trades at < 7x earnings.
  2. Below Book – CK Assets is trading at 0.75 times tangible book value.   
  3.  Low Payout – The dividend payout ratio is at a very healthy 20%, although the yield itself is < 3%.
  4. High ROE – Return on Equity > 10% for past few years.
  5. Insider Buying – Li Ka Shing (the “superman”) purchased significant blocks of shares from the open market.

What Could Go Wrong

  1. Concentration – 80% of revenues are derived from real estate in Hong Kong and China, where there is a persistent talk of a bubble forming.
  2. Conglomerate – CK Assets is a weird conglomerate holding disparate assets such as real estate, airline leasing, home heating services and the like.

Disclosure: I am long CHKGF, please read additional disclosures here before taking any action based on this post.