Linamar

Linamar  -  LNR  .  TSX

This is what I thought in July 2016 when I first bought the stock...

Linamar is a large cap auto parts manufacturer. 60% of its business is in Canada with the other 40% spread across the US, Mexico, Europe and Asia. They also have an industrial scissor lift division which provides about a quarter of the company's profits. They have done very well since the depths of the last recession and have enjoyed strong earnings growth and expanding margins. On a trailing p:e basis, the stock looks extremely cheap with a p:e ratio of around 7 using my initial purchase price of $46.38. Many in the industry are concerned that dealer inventories are high and that the recent torrid rate of auto sales will cool off in the future, but at this price, I believe those concerns are more than priced into the stock. If the company can continue to deliver the way it has in the past, the current share price should offer an attractive entry point.