Straw Mattress to Steel Bumper (MGA): QAV America #54

QAV AMERICA 54 – MGA 2

[00:00:00]

Corrected Cam-PC-01 (1): Today, Cameron from QAV America joins me to unpack MGA Magna International, a major Canadian-based global automotive supplier and mobility technology company founded in 1957 and headquartered in Aurora, Ontario.

It ranks amongst the world’s largest tier one suppliers, I don’t even know what a tier one supplier is, but with 156,000 employees across 28 countries and 327 manufacturing assembly facilities. And do you think I can get a headlamp that will work in my car, Cameron? Not for any longer than about eight weeks is my experience, and then you have to replace them again.

Yeah, yeah, that’s right. So hi, Cameron. How are you? Good, Phil. Machinations of Magna, is that the title? The Magna Machinations. Is that what you’re doing- Yeah. Yeah, that sounds good-. to me today? I like that. Yeah, yeah. Yeah. Is it machinations or machinations? I don’t know. Uh, whichever you choose. Um, and a tier one supplier is a company that supplies lots of tier ones, I think, Phil.

They just. They have like a, a, a [00:01:00] warehouse stacked full of tier ones. Um, what does Magna mean in Greek, Phil? You’re, you’re an erudite, uh, educated, literate person. Uh, great, isn’t it? The great, yes. Yeah. Like, uh, Magnus Carlsen is the greatest chess player of all time, and that’s why he has that name. He lived up to his name.

Mm-hmm. Um- And, um, who was the, um, Roman history, who was the enemy of Caesar? Uh, Pompey the- Pompey the Great. Yeah, Pompey the Great. Yeah. Pompey, Pompeius Magnus. Yeah, good one.

MGA Magna International: So, uh, Phil,

Corrected Cam-PC-01 (1): uh, I thought before we get into this week’s deep dive, uh, I, I just went back and had a look at some of the others that we’ve done on the show over the last few months.

Do you ever go back and look at how they’re performing, all the stocks that you talk about, or you have your guests talk about on the show? No, no, I haven’t, haven’t done that. Uh, just, um, are, are, are we going to have one of those, um, um, snapping your braces with pride moments? Uh, well, some of them have done very well.

Couple haven’t, but that’s normal. You know, [00:02:00] Tony and I always talk about having a 60% success rate, which I think is what Buffett, uh, aims for as well. So I think we’ve done five stocks on your show over the last few months, and three are up and two are down. So the three that are up are NBR, Nabors Industries.

It’s up 31% since we did it a couple of months ago. I think, like, early March we talked about NBR. 31% in a couple of months isn’t bad. EC, Ecopetrol is up 18%. DB, Deutsche, which we did last time, I think, is up 8% since we talked about it. The two that haven’t done so well are PAGS, PagSeguro. They’re down 13%.

And SHG, Korean energy company, I think. They’re down 7%. So three good ones, two not good ones. Eh, it’s about what you expect, you know. Things happen in the market. Wars happen. Tariffs happen. Can’t predict the future. It’s worth, it’s worth noting though, isn’t it, that it’s a, it’s a numbers game as well. It’s [00:03:00] not, you’re not gonna get everything right, you know?

Um, we, we- Well, that’s why I said, like, a 60% success rate. Yeah. And it’s why we have rules to sell the ones that go the wrong way. You know, uh, we don’t stick around and wait to see what happens. We have hard rules to sell them and keep the winners. Anyway. Yeah. What’s that, what’s that old- I thought that was-

what’s that old joke, you know? Uh, yeah, sudden- a short-term trade which suddenly becomes a long-term holding. Right. Yeah. Yeah, that’s, uh, I take the same approach to stocks that I did to my first few marriages. Like, you cut your losses and you keep going until you find the winners, and then you stick with the winners.

A trail of broken hearts.

MGA Magna International: Oh,

Corrected Cam-PC-01 (1): well, I hope not. I hope they’re all doing very well. Anyway, let’s talk about Magna. Uh, so as you said, company’s been around for nearly 70 years, market cap of roughly 18 billion US dollars, 156,000 employees.

MGA Magna International: Well, as

Corrected Cam-PC-01 (1): as you said, one of the biggest auto parts suppliers, but, uh, I also read that they like to call themselves a mobility technology company, which I think sounds way sexier.

Uh, I think [00:04:00] their, their share price went up, like, 10%. Uh, it sounds sexier than auto parts supplier really, doesn’t it? Mobil- no, no, no, we’re a mobility technology company. Oh, okay. Sure. Right I don’t know. I was thinking, I was thinking old people on mobility scooters. Oh, yeah. Yeah. It’s not as sexy. Well, unless you’re into that kind of thing.

Who knows? Um, like lots of companies that appear on our buy list, particularly in our US buy list, by the very nature of value investing, it’s a bit of a turnaround story. It’s had a couple of rough years, bit of a founder scandal going on. I don’t think that’s affecting the business at all ’cause he’s been out of the business for some time.

But it’s sort of a classic value stock in it’s a brand that most people have never heard of because they’re behind the scenes, but they’re running a great business. Been around a long time, very deeply embedded in their industry, which is part of the reason they had a rough couple of years. We’ll get into that.

Listed on New York Stock Exchange and also the Toronto [00:05:00] Stock Exchange. Price today is around about $64.58 US. That’s on the New York Stock Exchange. Founded in Canada, as you said, Aurora, Ontario, sort of north of Toronto. So Tony. It’s a shame Tony’s not, uh, with us today. He, there’s a couple of things he’d like about this.

One, he lived in Toronto for, I think, five or six years. Uh, he probably knows Aurora well. Probably might even know Magna. Uh, maybe he

MGA Magna International: played

Corrected Cam-PC-01 (1): golf with people from there. I don’t know. But, uh, also the, uh, founder of this is into thoroughbred horse breeding and, uh, Tony’s not with me this week because he’s buying and selling horses on the Gold Coast.

According to their website, Magna is one of the world’s largest automotive suppliers and a trusted partner to automakers in the industry’s most critical markets, North America, Europe and China, with a global team and footprint spanning 28 countries

MGA Magna International: So

Corrected Cam-PC-01 (1): So they’re a big deal. The founder [00:06:00] is a guy called Frank Stronach.

MGA Magna International: Now, he

Corrected Cam-PC-01 (1): he was born Franz Strosack.

MGA Magna International: How’s your, how’s

Corrected Cam-PC-01 (1): how’s your German? I know your Italian’s pretty good, Phil. Not very good, no, no. How’s your German? No. We don’t like Germans in Italy. Well, my wife, uh, speaks German. She tells me that Strosack means straw sack in German, which is what people used to live on, like a sack full of straw.

So his name is literally straw mattress. Have to imagine that somewhere in his genealogy there was a, the local guy in the village that made beds for people. He was born in 1932 in- And, and I just wanna, and I just do wanna. I do love Germans, okay? I do love- Oh, okay. Nice backpedaling there, Phil. Born in 1932.

Well, we know, you know, Mussolini and Hitler got along famously for a little while anyway. Long, long history- Yeah. of the Italians and the Germans getting along. Born in 1932 in a little village called Kleines [00:07:00] Semmering in the Austrian province of Styria

MGA Magna International: Working

Corrected Cam-PC-01 (1): class family, left school at 14 to become an apprentice tool and die maker.

Precision metalworking. You make the metal molds, cutting tools factories use to stamp out metal parts at high speed. Incredibly skilled work, and stood him in good stead when, in 1954, 22 years old, he moved to Canada, arrived in Montreal, gets on a bus to Kitchener, Ontario, gets a job as a dishwasher.

Nothing to do with making metal parts at first, but built his first company from a rented garage in Toronto only two years later, 1956. He’s 24 years old. Company was called Multimatic Investments. Slept on a cot in the corner of the shop. Classic Silicon Valley startup story, but [00:08:00] in Ontario, not Silicon Valley.

Gets his f- In, in, in greasy overalls. yeah. Gets his first automotive parts contract in 1969, so takes a, takes a while to get to automotive parts. Then he merged with a company that he had a contract relationship with, I think called Magna Electronics, and in 1973 the whole thing gets renamed Magna International.

MGA Magna International: So he

Corrected Cam-PC-01 (1): So he was making actual metal parts in his garage and selling them to car companies. And what’s fascinating, among many things about this guy, is real- like it’s a real classic sort of, uh, story of a guy who built an enormous business. Still alive, by the way, in his 90s. He, his management philosophy is what he called fair enterprise.

He was a bit of a commie, I think, by the sounds of it, very suspicious about how companies treated their workers, so he built a formal system in [00:09:00] 1971 where a fixed percentage of profits every year was pre-allocated to employees, management, investors, and social causes. 1971

MGA Magna International: it’s

Corrected Cam-PC-01 (1): It’s written into the corporate charter, 10% of profits go to employees every year before anyone else gets their cut.

MGA Magna International: And

Corrected Cam-PC-01 (1): And this was the thing that made Magna different, because employees and management had skin in the game. They produced better parts. They worked harder. They had more incentive. There was less waste, less industrial action, and it turned into a $40 billion company. So

MGA Magna International: Based on that

Corrected Cam-PC-01 (1): on that- So you can do, you can do good and make money?

Yeah, that’s what I was gonna say, but wait till we get to the sex scandals before you, uh, pass judgment on how much good

MGA Magna International: he

Corrected Cam-PC-01 (1): he did. Um, still going through the courts, uh, as it turns out. But the m- anyway, the, the [00:10:00] mechanism of how the employees get paid seem to be changing. I tried to figure out where it’s at.

It’s, it’s a little bit murky. So 10% of pre-tax profits, pre-tax too, to, uh, to employees, still technically embedded in Magna’s corporate constitution. It can’t be changed without management and shareholders and employees all coming to a consensus about the change, so it’s pretty interesting. You weren’t here.

Um, oh, we haven’t done the show about Germany, speaking of Germany. I don’t think you and I did that. No. Tony and I. Oh, well, I, I did a, an American show, uh, a couple of weeks ago. We were talking about Deutsche Bank. Oh, we did do Deutsche Bank. No, we, we, we- So it must have been Deutsche Bank. we’ve done Deutsche Bank.

Yeah, that was the last one. We did do Deutsche Bank. Yeah. Yeah. Mm. Remember they have that system in place where the, there’s two boards, and the employees get to vote for one of the boards? Yeah, that’s right. Well, this is a bit, bit like that, but different. Um, so they, they, they have to all agree, uh, if they’re gonna change this, uh, structure for how the, the profits get divvied out.

The full original formula was 10% to employees, [00:11:00] 7% to management, and a minimum of 20% of net profits returned to shareholders as dividends.

MGA Magna International: And

Corrected Cam-PC-01 (1): And because changing it requires employee consent, it makes it quite hard to just unilaterally remove as the company started doing well. Still in the corporate constitution, but how it plays out in practice is a little bit hard to figure out.

So it’s like there’s deferred remuneration and shares and a share structure and all this kind of stuff. I really didn’t have time to break it all apart. But I did note in one of their corporate documents that they crow about the fact that for eight consecutive years they’ve been named one of Fortune’s World’s Most Admired Companies, and for four consecutive years, one of Ethisphere’s World’s Most Ethical Companies.

So they’re doing something right, however it works. I also like this, talking about management. There’s a statement in this, one of the corporate, uh, reports I read. “We believe it is [00:12:00] important that each director be economically aligned with shareholders. We try to achieve such alignment in two principal ways.

Equity maintenance requirement. Each director at large is required to hold a minimum of $825,000 of Magna common shares and/or deferred share units, DSUs, within five years of joining the board. Each committee chair is required to hold a minimum of 900,000 of Magna common shares and/or DSUs within five years.

The board chair is required to hold a minimum of 1.5 million of Magna common shares within three years of becoming chair.”

MGA Magna International: So

Corrected Cam-PC-01 (1): So we like to see skin in the game. When we do our Australian checklist, we actually score companies based on how much of the company the board holds. The owner/founder metric we call it.

Um, Warren Buffett’s always been a big fan of seeing directors have skin in the game. Uh, we don’t do it in our American show because it’s hard to get that number programmatically out of Stockopedia, but it’s something I am [00:13:00] planning on

MGA Magna International: coding

Corrected Cam-PC-01 (1): into my process at some point. I didn’t actually get a number on these guys at the end of the day, how much of the stock their s- their sh- directors own, but at least they’ve got the right policy in place.

MGA Magna International: A

Corrected Cam-PC-01 (1): A couple of things on Stronach, straw mattress. Um, so he became extremely rich and also extremely controversial. He, uh, by the early 2000s, he had a dual class structure in place, Rupert Murdoch-esque, uh, classic founder king succession style thing where there were Class A shares, which the, uh, general public could buy, and then a special share class that he controlled that gave him dramatically more power in the voting than his economic interests warranted.

In 2010, shareholders pushed back hard enough that the dual class shares were eliminated. He got a massive payout in compensation, billions of dollars, and stepped away from operational [00:14:00] control of the business

MGA Magna International: So

Corrected Cam-PC-01 (1): So he’s been gone for, mm, decade and a half.

MGA Magna International: um, and

Corrected Cam-PC-01 (1): and has had quite a complicated later life. As of right now, May 2026, he’s 93 years old.

MGA Magna International: He’s

Corrected Cam-PC-01 (1): mid-trial in Toronto on sexual assault charges, 12 counts involving seven women, allegations going back to the ’80s and ’90s. He pled not guilty. Verdict is expected in the next couple of months, and then there’s a second trial after that which has been delayed to 2027.

MGA Magna International: Uh,

Corrected Cam-PC-01 (1): another sexual, uh, assault allegation.

So, um, not great. You don’t wanna be going through that ever, especially in your early 90s.

MGA Magna International: But

Corrected Cam-PC-01 (1): he’s been away from the company, as I said, for a long time, so has no impact really on the business, but just part of the, uh, messy story surrounding Mr. Straw [00:15:00] Mattress.

MGA Magna International: So,

Corrected Cam-PC-01 (1): uh, this is a

MGA Magna International: very

Corrected Cam-PC-01 (1): very interesting business in terms of the shareholding.

There’s no controlling shareholder. Pren- Pe- uh, no, Pzena, P-Z-E-N-A, Pzena Investment Management’s a value investor. They own about 10%. Vanguard own about 9.8%, but it’s broadly held. There’s no single, uh, person or company now that owns a controlling interest in the company. Aside from all that, as I mentioned earlier, Stronach is into thoroughbred horse racing, which Tony would love.

Uh, breeding and racing. Started a business decades ago with his daughter

MGA Magna International: And

Corrected Cam-PC-01 (1): And then ended up suing her for mismanagement. So, you know, there’s all of that kind of Succession-esque stuff. Did you watch Succession, Phil? No, I never, no, I was never into Succession, I gotta say. Oh. Yeah. Great show I should give it a go, but I’m just, I don’t know, I’m just not trying not to spend my evenings, um, you know, sitting in front of the idiot box too much.

Yeah, no, it’s ’cause you’re doing kung fu and reading annual reports. No, [00:16:00] wait, that’s me. Um, so four divisions of the company. So imagine you’re a car company, um, BMW, Ford, Stellantis, whoever. Every year you decide you’re gonna build a new vehicle model. You design it, and then you go to Magna and say, “Build this for me.”

That’s basically it. Um, either the parts or in some cases the entire car. They basically go, “Yep, we can make everything that you need for your car.” So a lot of times these companies, these car companies don’t actually make their own cars anymore. They just design it and then outsource the manufacture of it to somebody else.

MGA Magna International: Uh, we’ve

Corrected Cam-PC-01 (1): we’ve seen that a lot on this show over the last couple of years. It’s sort of the very common business model. You do the marketing, uh, you, you own the brand, but you outsource the manufacture or the maintenance, whatever it is, uh, the underlying hardware part of the business to people who specialize in doing that.[00:17:00]

So they’ve got- However, however- Hmm. on that point, um, I believe that companies like Tesla, um, do all of their own manufacturing in-house. They don’t outsource anything, and that could possibly be a risk in the future of, uh, car manufacturing in this business. Yeah, I think, you know, Elon’s big on getting efficiencies from.

He does it with SpaceX too. I think he has vertically integrated all of that side of stuff too. He’s

MGA Magna International: a

Corrected Cam-PC-01 (1): A different cut, as we know, as, as a businessman and as a human being. How many kids has he got? 14? He likes to vertically integrate population control as well. Just do it all myself. I can’t wait for other people to do it for me.

So they have a couple of, about four different divisions essentially. Body exteriors and structures, that’s the biggest division, does about $16, $17 billion a year. Everything on the outside of the car, so door panels, bumpers, hoods, the structural pillar that goes up beside the windscreen. If you bump a shopping [00:18:00] cart into a car door, you’re probably bumping into something that Magna made.

This is the bread and butter side of the business. Margins are about 6.7%. They were in Q1 2026 anyway, from what I could tell from the report, so solid little business. The second biggest is power and vision. Uh, good David Bowie, uh, album from the mid to late ’80s, I think it was. Uh, no, that was Sound and Vision.

Sound and Vision. Yes. Sound and Vision. Close. Close. It was a compilation really of stuff from, uh, the Berlin albums, I think, wasn’t it? And some other stuff. Yeah. Yeah. Anyway, uh, this is about $15 to $16 billion a year. This is where it gets more interesting. They have cameras, driver monitoring systems, mirrors, also transmission systems and eDrive systems.

That’s the electric motor and gearbox combinations in EVs. They also used to get into the lighting business, but as I’ll come to in a minute, they [00:19:00] sold or they’re in the process of selling the lighting bit off. Margins for this division jumped from 3.4% to 6.5% in the last year, which is a big improvement.

The, the current CEO’s been doing a lot of work to, uh, streamline the business. But this is also a division that caused them a lot of pain and angst over the last few years, so I’ll get to that soon, too.

MGA Magna International: The

Corrected Cam-PC-01 (1): The third division is seating systems, about $5.5 billion a year. Seats, that’s basically it. They, they make seat asse- full seat assemblies delivered just in time to a car assembly line.

That division was losing money a year ago, but now it’s back to positive, so that’s good story. And then the fourth division is complete vehicles, about $4.5 billion a year. This is the weirdest one. This is where they actually assemble entire cars, soup to nuts.

MGA Magna International: You

Corrected Cam-PC-01 (1): You say, “Hey, uh, got this BMW we wanna make.

Can’t be bothered. Volumes aren’t big enough for us to get involved in any aspect of it. Just make the whole thing for me.” “Sure, no problem. Can do it.” And that’s what [00:20:00] they do. So bit like,

MGA Magna International: I don’t

Corrected Cam-PC-01 (1): I don’t know, who’s, who’s a company that doesn’t make stuff? Coca-Cola just outsourcing the manufacturing of all of their Coke to somebody else, and they just own the brand.

So that’s it. Total revenue for the first quarter of 2026 was about 10.4 billion annualized, doing sort of $41 to $43 billion. Guidance for the full year is 41.5 to 43.1 in fact. So why are they a value buy? Well, the share price has dropped a lot, uh, in the last four or five years. I think it went from like 98, 99 bucks in 2021 down to 33 by April last year.

So that’s a haircut and a half.

MGA Magna International: And

Corrected Cam-PC-01 (1): And it’s doubled though in the last year because it’s sort of in a turnaround. So I mentioned the part of the business where [00:21:00] they do, uh, power and vision, the David Bowie division.

MGA Magna International: You know,

Corrected Cam-PC-01 (1): You know, the,

MGA Magna International: everyone, all

Corrected Cam-PC-01 (1): all the car manufacturers got excited about EVs, uh, four or five years ago and, you know, I think Tesla put a fire underneath them and they all decided that was the future.

So ’21, ’22, ’23, everyone was in a frenzy, “Oh, we’re gonna need all these EVs. We’re gonna be selling all EVs.” So Magna went and spent a ton of money building out EV manufacturing capability, battery enclosures, electronics for EVs, e-drive systems. And

MGA Magna International: as

Corrected Cam-PC-01 (1): as you can probably guess, we actually. I don’t think we’ve done Ford on your show, but Tony and I did a thing on Ford a while back, maybe a year ago now, and the same thing happened with Ford.

They built out a huge EV division and then they took a multi-billion dollar haircut on it. These guys, same thing. The EV programs ended up getting canceled or deferred or scaled back. [00:22:00] Ford pulled back, GM pulled back. They went, “Oh, you know what? People aren’t actually buying EVs. They want big petrol drill baby drill trucks.”

MGA Magna International: And Magna was

Corrected Cam-PC-01 (1): was left sitting on a pile of EV manufacturing assets that weren’t gonna return them the, or generate the returns that they had hoped.

MGA Magna International: So in

Corrected Cam-PC-01 (1): in 2025, they took a $591 million writedown. That’s US dollars, real money. And then, uh, then Q1 2026 last month, they took another writedown of $485 million, this time on the lighting and rooftop business that they’re selling off.

So in the last 18 months, they’ve written off over a billion dollars of asset value. Then

MGA Magna International: President, uh, Donald

Corrected Cam-PC-01 (1): Jesus Trump came into power and, uh, whacked tariffs on a- anything coming in from Canada and Mexico, and guess where all of their [00:23:00] stuff gets made? Oh, Canada and Mexico. So big tariff hit on them.

It was like 25% tariffs on everything that they were, uh, manufacturing that had to go to America. So that knocked them around a lot. I think the $33 low in April 2025 sort of aligns perfectly with peak tariff uncertainty and madness. As we know, though, the Supreme Court has told Trump, “No, uh, you can’t do that.

You have no authority. Roll them all back. Pay them all back.” Not sure how that’s going, but that’s probably corresponded with a little bit of an uptick in their business, apart from the fact that they’re selling off some of these divisions and done some major write-offs. Uh, interestingly, no major executive turnover as a result of all of this loss, but the CEO, Swamy Kotagiri, been there for decades.

He’s an [00:24:00] engineer by background. He took over as chair in 2021, right at the peak of EV frenzy, and he’s the guy cleaning it up now.

MGA Magna International: So the

Corrected Cam-PC-01 (1): the Q1 results actually show the business is running better than it has in years. Uh, the EBIT was up 58% year on year. Margins are expanding, as I mentioned earlier. So the operational business is recovering strongly.

Balance sheet is still absorbing the costs of the EV disasters. But, um, you know, it, it’s a business that’s getting back to core focus and seems to be run as well as it’s always been run. I think at heart, it’s a very good business. A lot of really big, well-entrenched customers. They’re dominant in their space,

MGA Magna International: and they

Corrected Cam-PC-01 (1): they just,

MGA Magna International: uh, you know, had a

Corrected Cam-PC-01 (1): had a bad run with this EV/uh, tariff stuff in the last four or five years.

So I told you they’re selling off, uh, the lighting and rooftop [00:25:00] stuff. That’s bringing in about $1.1 billion,

MGA Magna International: which they

Corrected Cam-PC-01 (1): they can use to, uh, run the business or pay off debt or whatever they wanna do. Um, that’s basically all I have to tell you.

It reminds me of some of the other companies that we’ve talked about on the American show over the last couple of years. The most, uh, common, or the most obvious one is one that I didn’t do with you, but I did with Tony. A company called Commercial Vehicle Group, CVGI. They make inside parts for truck cabs.

I called them the, uh, the sausage in the truck bun, I think. Um, so you make a truck. It’s basically a, a hotdog bun, and these guys make all the stuff that goes in. It’s just like it’s an empty template until they come in and they put the very, very plush seats. And, and apparently truck cabs are like

MGA Magna International: Uh, deluxe,

Corrected Cam-PC-01 (1): uh, rock and roll- Yeah.

The Hilton. The Hilton on the Gold Coast Yeah. Hotel suites. Yeah. Uh, but I, I talked about them on our show, [00:26:00] uh, at the beginning of April, uh, this year, and they’re up 40% then. So, uh, fingers crossed they continue to do well.

MGA Magna International: So,

Corrected Cam-PC-01 (1): uh, the scorecard, let me get into that. I’m gonna scroll down my notes here ’cause I think it’s down the bottom.

Here it is.

MGA Magna International: So

Corrected Cam-PC-01 (1): So as you know, and as people have heard me talk on your show before know, the way that QAV works is Tony built a, a spreadsheet checklist. Over 30 years he’s been refining it, and we take all of their fundamental data and we run it through this checklist, and it provides a bunch of scores for us.

And- It’s all about the published numbers as released in, uh, reports

MGA Magna International: Yeah. We d-

Corrected Cam-PC-01 (1): We d- we don’t really care much about the story. We don’t try and predict the future. We do look a little bit at, you know, what analysts are saying about future EPS and that kind of stuff. It’s a score and a whole suite of scores, but we’re looking historically.

The, the questions that we’re trying to [00:27:00] answer really are, does this seem to be a business that’s being run well? Is it generating cash? And do we think we can get it at a discount to its intrinsic valuation? And we have a number of ways that we create intrinsic valuations. We have a current IV, we have a future IV, and we have a, a bunch of other metrics that we score it on.

Then we add up all the scores, and the stocks with the highest score are the ones that we tend to look at buying.

MGA Magna International: So

Corrected Cam-PC-01 (1): So these guys, when I did my analysis on them a couple of days ago, share price was about $64.58. Average daily trade, by the way, is about $120 million, so big enough for most of us to buy, even Tony.

MGA Magna International: Uh, Stockopedia

Corrected Cam-PC-01 (1): stock ranks 99, which is pretty good. Stockopedia quality rank was 86, which is pretty good. The Piotroski F-score measure of financial health was seven, which is pretty good.

MGA Magna International: Their

Corrected Cam-PC-01 (1): Their price was not less than our IV number [00:28:00] one, so I couldn’t score it on that, but it was less than our IV number two, our future IV, so I could score it for that.

The price wasn’t less than the book value or book value plus 30, so I couldn’t score them for that. Their price to operating cash flow was 4.22. That’s really quite good. We, we won’t buy anything that has a price to operating cash flow over seven. We, we use that instead of PE for new, uh, listeners. Um, we think price to operating cash flow is a cleaner metric than price to earnings because earnings can be toyed with and manipulated a little bit more easily than operating cash flow.

So 4.22 is good. Basically means you’re gonna get your money back in about four years if you just look at operating cash flow. So that’s a reasonable amount of time to expect your money back. Um, the yield, their dividend yield is about 3%. It’s not better than the bank rate in the US, so I couldn’t score it for that.[00:29:00]

They do have a new three-point upturn, so we look at sentiment charting, and if a stock has recently turned around since its last financial reporting, we’ll score it for that because we think that’s a good early indicator that the market might be getting behind it. And it does have positive book value growth, so we could score it for that

MGA Magna International: So all

Corrected Cam-PC-01 (1): all in all, I gave it a QAV quality score of 76.92%, and we really like anything over 75%, so it got over that benchmark, and a final QAV score of.182.

We look at anything over.10. So it wasn’t at the top of my list, but it was not too far. I think it was in, like, the top 10, and I checked it again before we came on the show this morning. It’s still in buy territory for us. Current price is $65.20 this morning, so it’s up a little bit since I d- did my analysis on [00:30:00] Monday.

MGA Magna International: And

Corrected Cam-PC-01 (1): that’s it. I’m gonna add it to our portfolio this week, and we’ll see how it goes.