Magna International Inc T.MG

New high

[nelson07]

On June 30th i wrote on this board that a small steel company had transformed itself because
they had equiped itself with a one of a kind automated line

On that day, the stock was trading at $3.67 and closed at $3.84.

As i am writting this post,it's at $4.38.

This is the second leg up.After it's first leg up at the beginning of June, it consolidated and is now
starting it's second leg up.

With EPS of at least 80 cents this year and north of $1 next year, this stock is just starting
to climb.

Here is a good post i got today on DRX board.

Some investors are strating to get it.

This company had 1 plant and 4 production baies in 2001.

With only these 4 baies, they had sales in 2001 of 333 millions and profits of $1.11/ shares.
In 2002, sales were 510 millions and EOPS of 93 cents.

Then disaster arrived.They had huge lost on big contracts.The NY football field was a disaster.
They had to litigate and lost a lot of $$$.

Fast forward 20 years of learning.They now have a plant in Terrebone with 11 production baies
and another plant in Montana.

The beauty is the automated new line with 4 welding robots that reduced the man hours needed
by 6.

This is the game changer.They have learned from the past and profitability is on the rise.

Gross margin in the latest quarter was 16.8% vs 12.1% a year ago.

Two year ago, DRX had sales of $281m and EPS of 29 cents
Last year Sales were lower to $251m but EPS was up to 46 cent because of the increased profitability of the new automated line.

In Q1 of this year, EPS was again up VS last year at 16 cents.

With the last contract announcement, order book is now north of 500 million.

Like i said, some investors are starting to see that DRX will earn at least 80 cents this year
and much more next year.

They are in the sweet spots will all these infrastructure build up.

We will see $6 and more before long.

The Paschini family have 45% of the total shares so their interest are directly in line with ours.

In the early years of this company they made big mistake.But the last 3 years have shown me that 
they are very smart.Also, the CFO(JF Boursier) seems brillant.I got in contact with him twice and he seems very sharp and knowledeable.

The turn they made by automating the Terrebone plant with this one of a kind machine in north
america has turn them into a highly profitable company

I have 58550 shares and won't sell.because the beat is yet to come.

Being so small, DRX is not followed by any institutional so it flies under the radar but it will eventually get more attention.


 

[nelson07]

It's not like i did not tell you guys.DRX is trading at $5.00 The automated line as completely changed the profitablility of this company. Don't take my word, go see this morning results.DRX  will earn more than  $1.20 this year. What do you want to pay for $1.20 of earnings for a company that as a great balance shhet and a huge tail wind with all these infrastructure