Mike Vinokur - BNN - TOP PICK Magna International (MG TSX)
This is a well-known auto parts manufacturer/supplier. We think the market is underestimating Magna’s earnings power. It keeps winning big platform contracts with the largest of OEMs. Magna trades at seven times estimated next year’s earnings, whereas in our view it deserves to be trading at least at nine to ten times. We believe that earnings could be close to $9.50/share in 2025. If we are right, then this equity is substantially undervalued. In the meantime, we collect a 4.4 per cent dividend while we wait for the revaluation. We entered this one a little too early and recently averaged down at just below $58.
Owned personally and in fund , not by family