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Magna International Inc. (MGA)
NYSE - NYSE Delayed Price. Currency in USD
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Very bad economic data this week. Falling consumer confidence, contracting GDP, stubbornly high PCE inflation, falling real disposable income and real consumer spending, and sharply lower Chicago PMI all confirm a looming deep recession. The prices of my MGA bearish derivatives are rapidly rising with the increasing level of broad-based market fear.
The S&P 500 is down 22% YTD, yet analysts have yet to adjust down their 12-month EPS estimates. Forward EPS remains at $228.97, with a current PE of 18.94 and a historical mean PE of 15.97. If upcoming earnings are reported 15% below the forward at $194.62 earnings per share, then it would be reasonable to expect an eventual PE reversion to the historical mean. At a PE of 15.97 and an EPS of $194.62, the S&P 500 would be 3,108, implying that there is still at least 20% more downside for the S&P 500.
Yuck.. 52 weeks low today.. Is it time to buy ?.
Ok, pick 1 k, I work in one mg company, they doing okay
Please take a look at ticker ILUS - ILUS International: EVs, Drones, UAVs, Urban Mining and patented firefighting technology. ILUS is profitable in their first year and uplisting. They have increased revenue 482% year over year. ILUS has completed 8 acquisitions in the last 18 months. One of the more notable is that of Vira Drones, with an estimated billion dollar valuation. ILUS has also recently acquired Wikisoft, ticker WSFT. Please see Yahoo Finance for more details and news. They are undervalued and worth a look.
It is happening…
wouldn't mind 4%
Please take a look at ticker ILUS as well my fellow investors, they are rapidly expanding & uplisting in 2022. ILUS International is a rather new company, they have increased profits and revenue every quarter since inception.
ILUS Q1, 2022 revenue is up 482% over Q1, 2021. This does not even include the revenue from a couple of their most recent acquisitions.
ILUS just announced a 100-million dollar plus in revenue acquisition.
This news came out of Yahoo Finance on 5/25/2022.
In addition to this large acquisition, ILUS has just announced that they have acquired Wikisoft, ticker WSFT. WSFT is now a member of the ILUS family.
ILUS is in the process of becoming a conglomerate, with several different companies and divisions under the ILUS umbrella.
ILUS manufactures EV's, UAV's, and Drones to name a few of their many business endeavors. They are also involved in Urban Mining and the very lucrative firefighting and fire safety technology sector. ILUS holds patented firefighting / safety technology. They are developing technology to assist with the containment of both EV battery, and wildfires. The wildfires out west are a major concern and solutions are being developed. ILUS is looking to save lives. They have had several meaningful discussions with the state of California, among other states as well.
ILUS is an M & A company and growing fast.
ILUS is about to begin manufacturing the E-Raptor, the worlds first and only six-wheel, all electric utility vehicle. This will take place at the new 600,000 plus square foot facility in Serbia. It is a part of the significant deal that ILUS has recently signed with the European Union. ILUS will incorporate in the manufacturing process their own urban mining / battery recycling into their EV lines.
(Please see the ILUS / E-Raptor website to view the E-Raptor)
ILUS has completed "8" acquisitions in the last 16 months. Vira Drones is one of the more significant. The estimated valuation is over 1- billion dollars.
ILUS is also reducing their number of outstanding shares by 180 million shares, in addition to all the other excellent news they have recently released. Please see OTC Markets for their most recent share reduction that has been posted. They always do what they say they will do, always.
ILUS International is in a very substantial, long-term agreement with the European Union, and will begin manufacturing a variety of vehicles including those used by the military and defense sectors in Europe, as well as the private sector. ILUS is at least worth a look, certainly undervalued. ILUS has several new acquisitions and revenue sources yet to be officially announced.
(Please see Yahoo Finance for recent news & updates)
German authorities are warning of a financial crisis and a collapse of industries with the increasing prospect that Russia could cut off natural gas to the country. Many industries including the automotive sector use natural gas in their manufacturing process or are connected to companies that heavily utilize natural gas.
every time it has gains for a little while, it loses it all in a couple days then starts the cycle all over again...Every time!!!
Going to be interesting today I think
I understand the bullish thesis for low auto dealer inventories, but this thesis is only valid if Magna can find relief from increasing margin compression. Magna’s Quarter 1 Adjusted EBIT fell to 5.3%, a year-over-year decline of 230 basis points. Commodity prices skyrocketed in the first quarter and have all remained extremely elevated or shot up further like oil in Q2. At best, only about half of the year-to-date incremental margin pressure was reported in Q1 2022. It is therefore reasonable to expect Magna’s next quarterly earnings report to feature a further decline in EBIT. Note that automotive suppliers like Magna International often lack the pricing power to combat inflation because of low OEM switching costs.
Expect inflation to continue raging. Governments and central banks have consistently underestimated inflation this past year. These authorities fail to publicly acknowledge the impact from trillions of dollars in Covid stimulus, added to an already highly leveraged global marketplace. Yes, there are intensifying supply chain pressures from Russia’s invasion of Ukraine, but the war and the global supply chain are only part of a larger macroeconomic picture.
High demand and a tight labour market, although bullish economic indicators on their own, are not good in the context of high and rising inflation. The essential goal of raising interest rates is to cool inflation by weakening demand. If inflation is accelerating further despite a rise in interest rates, higher rates are needed to subdue demand and thus weaken inflation. Yet, central banks would be dramatically raising rates on the most leveraged global market in history. Not hiking rates high enough will lead to stagflation, creating demand destruction and widespread real-income poverty, while destroying the margins of companies across markets.
The dilemma is therefore clear – a global market crash through intensive monetary policy or total economic destruction through prolonged stagflation. Both decisions would lead to incredibly painful outcomes, but the first option is preferable - distribute more pain to the short-term but create better long-term results for humanity.
I have been asked before how much I think this company’s stock will decline. Even though I think Magna is a good company, I will be completely honest and state that I am anticipating a crash as severe as 1929. And yes, that I why I have been 100% short on Magna since 2021 while increasing my position on bear market rallies.
There is a new geopolitical risk for Magna International. The Chinese government has vowed retribution for Canada’s ban on Huawei Technologies and ZTE from Canadian 5g networks. Former CSIS director Ward Elcock has said that China will likely retaliate in some way, citing China’s past retaliation to Canada’s arrest of Meng Wanzhou through the detainment of Michael Kovrig and Michael Spavor, and trade restrictions.
Magna operates more assets in China than any other Canadian company, with 68 manufacturing facilities and 22,600 employees in China. China could enact measures that restricts Magna’s production in China. Such retaliation would be pushed by the CPC as an equal force punishment for Canada’s ban on Chinese 5g tech.
Know that if this does happen, Magna will eventually recover but the days ahead will be very dark. Eventually, I will invest in Magna and end my short position that I began in 2021, but not until the extreme macroeconomic and geopolitical risks have been fully priced in.
I am now ready to say we have made a bottom..onwards and upwards...bold call but that's what I see...
First off. Thank you for your thoughtful analysis. Boards such as Yahoo are dominated by commentary that is very limited in depth/scope and basically useless. Yours is refreshing. That all said. I think it is very hard to predict make macro economic predictions. Economists are the worst at predicting. But your pts. seem very valid to me. That all said. I did not invest in MGA because I had strong feelings about the economy generally. I invested because it is my understanding that MGA is well positioned in the EV space. I think that with all the smaller manufacturers trying to get into EV there will be a demand for companies like MGA that not only make marking leading EV parts but can actually manufacture the final product. There a companies out there that want to manufacture/sell EVs but don't get how difficult it can be to actually manufacture a car. Thus an opportunity for MGA. Even if the economy slows, there will still be a growing demand for EVs due to some of the very reasons you pointed out in your post.
My two main holdings MGA and PH....Quality companies that will weather the storm and are poised to grow. Collect solid dividend while you wait....Short sellers beware.
l owned 2587 shares and keep on adding more every week diamond hand baby. I believe in the long term and this stock will break 100 plus per share
3% dividend to wait
This needs to break the $80.00 resistance mark and they stay there in short term to see any real gains...
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