Ticker: MGA, Buy below $50.
Magna International is leading global automotive supplier.
Why I Would Buy
- Cheap – Magna trades at < 8x earnings.
- Reducing Sharecount – Magna is aggressively buying back stock.
- Low Payout – The dividend payout ratio is below 20%, while the yield is 3% +.
- High ROE – Return on Equity > 10% for past few years.
- Low Debt – Debt to Equity is just 30%.
What Could Go Wrong
- Trade War – Trade War with China is weighing the stock down.
- 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.