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TSE:LNR
Linamar Corp (LNR.TO)
Financials 
Technical Analysis 
Took profits last November. Likes their resilience and supply constraints after the Russian invasion. The company remains sound.
Andrew PyleLNR 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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No debt. Massive growth potential. Double-digit revenue and earnings growth. Growing 15-20% over the next few years. Lots of orders for electric and hybrid vehicles. Dirt cheap. Auto parts are early-cycle winners. So once a recession is "declared", look for these stocks to take off. Yield is 1.38%.
(Analysts’ price target is $87.80)
Bruce MurrayIt has had 28% revenue growth and more than 80% earnings per share growth. It raised guidance with the industrial component. The auto parts side is forecasting below average margins so there is an opportunity if it can improve these margins.
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Premium contentRecently reported EPS was up 83% as quarterly sales made a new record. Cash reserves grew, while the company bought back shares. The company announced a major investment into EV parts manufacturing that will begin in 2025. It trades at 10x earnings and below book value. Its dividend is backed by a payout ratio under 15% of cash flow. We recommend placing a stop-loss at $54, looking to achieve $86 --upside potential of 23%. Yield 1.3%
(Analysts’ price target is $86.00)
Coming out of a period of bottlenecks. Really good exposure to high-margin products. Car market is still pretty strong. Growing backlog of new EV wins. Very cheap at 8 PE, which doesn't reflect upcoming growth. Big capex spend, but this provides years of tailwinds.
Jamie Murray Premium contentOur PAST TOP PICK with LNR has triggered its stop at $67. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 12%, when combined with our previous recommendation to cover half the position.
Premium contentPremium content
Massive increase in auto production in North America.
Supply to GM and Ford growing rapidly.
Very good company that is a good long term hold.
Expecting a $100 share price.
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With recently reported quarterly sales up 28% (to all time highs) and EPS up 83%, we reiterate LNR as a TOP PICK. Global market share is growing as are cash reserves. It trades at 10x earnings and under book value. We recommend trailing up the stop (from $54) to $60, looking to achieve $87 -- upside potential over 20%. Yield 1.2%
(Analysts’ price target is $87.80)