Last Updated On: January 1, 2019
Share Price On This Date: $45.30
One of Canada's largest auto parts manufacturers. Linamar also manufactures scissor lifts and heavy farming equipment.
Linamar is a $5 billion, large cap company with a spectacular track record of growth. EPS have grown by a factor of 4 since their previous peak at the end of the last business cycle in 2007. Currently trading at a p:e of only 5 to trailing earnings, this stock looks very cheap on the surface, especially considering its size and track record. However, investors are justifiably nervous about the auto sector in general. Car companies have been aggressively pushing out longer term loans and consumers may find themselves tapped out soon enough. Auto sales at the big car makers are starting to slide. The resolution of the NAFTA negotiations still leaves some unanswered questions. And the electric car bogeyman is out there on the horizon, threatening to put an end to the internal combustion engine. But all that nervousness has created a good buying opportunity, I believe. Linamar is actively positioning itself to win business in the emerging, electric car industry and they are also diversifying into other sectors. They already have a very successful division that manufactures scissor lifts. To this, they recently added a large acquisition in the farming equipment space. 50% of their profits now come from outside the automotive sector. With these moves, my hope is that there is plenty of opportunity for Linamar to continue to thrive and grow in the coming years.
For the full, in-depth review, please see Spotlight on Linamar.