Company Profile: Magna International is a diversified global auto supplier that designs, develops and manufactures high-tech auto systems, assemblies, modules and components, and engineers and assembles vehicles, mainly for sale to cars and light truck original equipment manufacturers.
Share Price: $40.77 (Jan. 18 Close)
Year-to-Date Increase: About 25%TheStreet Ratings Grade: Buy. Magna's third-quarter gross profit margin decreased from the same period last year, but sales increased. The company now has a quick ratio of 1.06, says TheStreet Ratings team, which shows that this company has the ability to cover short-term cash needs. Standard & Poor's View: Although auto analyst Efraim Levy points to the potential that Magna could be hurt by currency fluctuations and slower-than-expected demand for vehicles in general, and vehicles with high Magna content, "we believe Magna's valuation should be higher than most peers." Levy's view is driven by Magna's strengthening balance sheet, strong manufacturing capabilities and the company's implementation of several shareholder-friendly actions, such as a 2-for-1 stock split, a share buyback program and increased cash dividend payout. Magna also recently eliminated a dual-class structure that gave the former chairman, Frank Stronach, and three of his family members greater voting rights than other shareholders.