Magna International (MGA, Financial)
Magna International is one of the largest global auto suppliers. The company has leading market share positions in most of its major product lines. Results have been pressured because global auto production volumes have been depressed relative to normal levels over the past few years. However, as volumes recover, we believe that Magna will deliver material revenue growth and margin expansion off of today’s depressed earnings base. Further, Magna is particularly well-positioned among auto suppliers because the vast majority of its business is either unaffected by or positively exposed to the megatrends of electrification and autonomy. We believe that Magna, trading at less than 7x our estimate of normal earnings per share, presents an attractive opportunity to invest in a well-managed company in an out-of-favor sector.
From Bill Nygren (Trades, Portfolio)'s Oakmark Fund fourth-quarter 2022 commentary.
