Lear Corp. (LEA)

(Top Pick Dec 17/14, Up 32.84%) No longer in air parts but in auto parts. Split thirds between US, Europe and emerging markets. It is an attractive company.

Auto parts manufacturer. FM value is quite a bit higher than the current price. The P/E ratio is 10.5 times, which is not bad. The bad news, on a Price to Book basis, is that it is now trading at a high since the market bottom of 2008-2009 at about 2.5X BV. For an auto parts Company, that is getting up there. He typically sees them peaking at about 3.5X BV, so there is more room. He can see some upside, but don’t fall in love with it.

(A Top Pick May 1/14. Up 40.92%.) He owns a lot of auto exposure right now. This is just a play on a recovering global consumer, and is one that he would continue to Buy at these prices. He moved out of this in September at about $103 to get into some other space

Primarily automotive seating or interior work. Basically provides to all the major producers around the world. The run rate in North America is around 17 million units. Over 20 million units in Europe and over 21 million in Asia. Trading at a very modest multiple of around 10X earnings and has good growth ahead of it. Dividend yield of 0.87%.

Auto parts sector. Seating and electrical components. Good growth in North America. Europe is about 30%. They are doing remarkably well and generating good cash flow. Analysts are underestimating their opportunity. Looks like it is ready to take another leg higher.