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Opinions Stockchase Insights
Linamar CorpLNR.TOBUY ON WEAKNESSMay 26, 2023
Stockchase InsightsStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Has owned this many years. LNR is well-positioned with plants in North America and Europe. The CEO has done an excellent job steering the company.
Michael SprungAlternative to Tesla in EV revolution. Has been following since 1986 when company went public. Very strong engineering talent within company. Demand for cars expected to grow generally speaking. Currently trading at 7x earning. Believes shares are very undervalued.
Bruce MurrayIndustry strikes have come and gone. Acquisition looks a little dilutive to the multiple, but it adds scale to product portfolio and adds cross-selling. Eventually should be accretive to earnings. Leverage still looks fine. Cheap at 5.6x 2025 earnings, estimated growth at 12.5%. Good deal here.
The industrial segment is doing very well. This consists of Skyjack in the aerial lift business, and the agricultural equipment division. Skyjack should continue to do well and can hold its prices steady along with a backlog of orders. The auto parts segment has not done well and the company just needs an improvement from the bottom to normal levels to lift the stock. It is near a 52 week low. Buy 5 Hold 1 Sell 0
(Analysts’ price target is $83.20)
Teal Linde
Auto parts, but has expanded into other industrial areas. Trades at a low multiple, selling into an industry where they don't have a lot of power because auto companies are so large. Well run, but too cyclical. Impacted by inflation and supply chain issues. Softening in consumer spending. Expensive transition from internal combustion to EVs.
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Premium contentOur PAST TOP PICK with LNR has triggered its stop at $65. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 6%, when combined with our previous recommendations.
Premium contentWith recently reported EPS growth of 55%, we again reiterate LNR as a TOP PICK. EV sales business segment represents 60% of business by 2027 in their long term plans. We like that cash reserves are growing, while the company still trades under book value and at only 11x earnings. We recommend trailing up the stop (from $60) to $65, looking to achieve $87 -- upside potential of 18%. Yield 1.1%
(Analysts’ price target is $87.80)
Stock looks great, and wanting to take out the highs of 2021. Bottomed before the market did last October, which is really positive. Higher highs, higher lows. Let the stock run. If it can take out $80, the next level is $100. Hold, even though the toughest thing to do is nothing.
LNR has a good balance sheet, but it does have about $500M net debt, which is about 1X cash flow. We like the company and the low valuation of 7X earnings, and like management. 2023 growth is expected to be above 30%, and 2024 in the 15% range, based on current estimates. We think there is upside here over five years, but in a cyclical industry a double may be pushing expectations a bit.
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