Linamar Corp LIMAF

Capital Allocation

[Jonathan9]

Excellent results once again. Outperforming peers.

If management doesn't feel like the company/stock is a good investment at this distressed price then why should anyone else?

Kudos to the last analyst on the Q&A.

Needless to say I expect the buybacks to start soon. It's time to be aggressive on the buybacks. Sustained buybacks every quarter.

[canuckstocks]

But they also have alot more debt than last year to pay down. They might wanna prioritize that with free cash

[Daudau11]

Now that was an unexpected market reaction at least to me.... down below $60 at a point on very good results and even stating that they will start to buyback shares on the CC

[AVALONSHARK]

I'm surprised as well. I know they projected a slow market, however as a business they are still projecting double digit growth. What am I missing ? CEO transition ? It's not like Linda is leaving the company it's merely a title change. Must be something else....

[longrun86]

I am pleased to be able to buy shares at this price.  Linda's transition makes sense to me.  My sense is that the market is still grappling with the mobility side of the market and doesn't yet understand the transformation that is taking place on the industrial side. It could take a while yet but it will happen eventually as long as the industrial side continues to grow and

[Daudau11]

I totally agree, I added today. GLTA!!

[ValueBets]

I agree, on the call, I even got the impression, it could be a tender offer. I wish they would buy 5-8-10%, one shot deal, up to 70$.  How bad would it be if they keep a higher leverage (which is really reasonable) for 6-9 more months? They will have above 500M in FCF, a lot in the next 2 quarters.  

[Jonathan9]

What a tremendous opportunity to buyback a large chunk of shares through NCIB or SIB. Gift by the market. Growth slowing. Need for CapEx at low end. Free cash flow to explode higher. Interest rates dropping.  Dream scenario to buyback a lot of stock.

[ValueBets]

I agree 100%. In 2022, they bought back 4M shares close to 60$ on average.. its the current price after a nice 24 months of results, market shares gain and a stronger industrial segment than before! If 2022 buybacks were made with good timing according to mgt, now is better than ever. On the last CC, Linda said that even with the low end in capex (6%), this range support long term double digits

[AVALONSHARK]

I'm new in this stock - How much do you guys feel the industrial business is worth?

[Jonathan9]

Industrial is Ag + Skyjack. My estimate is more than the market cap of the entire company currently. I think if the value isn't realized you set your self up for an activist to push for a spinout of "Linamar AgCo" and Skyjack. Insider ownership is high so most likely this wouldn't happen. Trading at one of the lowest EV/EBITDA in its peer group. 3.8X.  I would argue it

[ValueBets]

Again I agree 100%. I'm thinking, Industrial is easily worth 4G$ (and 5G in a not so depressed AG market). So this leaves Mobility to be worth enough to pay down the long term debt (think about all the assets they hold in the factories), they are worth more then the debt even in a liquidation event. More importantly, I love mobility, its profitable and permits organic growth when needed. I

[ValueBets]

In other words, I also think we are getting a great and profitable mobility business for free.