Lear ( LEA) (Part 1)

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Lear has been a source of great enthusiasm for analysts.

IBISWorld's Thormahlen believes that the company's decision to go through Chapter 11 was a "shrewd" business decision.

"No one faulted them for going through with it," Thormahlen says, even though the company didn't have the obvious solvency issues faced by other Chapter 11 graduates such as GM, Chrysler and Visteon. Still, Thormahlen says, since basically everyone else was going through it, too, the company had what might be viewed as a "free pass" to go through it as well; management made sure it took that free pass.

"They walked out cutting their debt in half," Thormahlen says. What's more, unlike peer Visteon, it remained diversified and therefore not completely reliant on a single or small group of customers -- though its exposure to the Detroit Three remains large.

Southfield, Mich.-based Lear filed for Chapter 11 bankruptcy protection on Jul. 7, 2009 and emerged with an enviable balance sheet on Nov. 9, 2009. Since then, it has received a number of corporate upgrades, which makes funding its debt easier. "Lear has been a monster since it became a publicly-traded company again," says Wall Street Strategies' Silver. With net sales of $9.7 billion in 2009 and about 75,000 employees in 35 countries, Lear's businesses primarily comprise of seating systems, electronics and electrical systems.

Silver likes auto suppliers such as BorgWarner ( BWA), Magna International ( MGA) and Johnson Controls for their push for fuel efficiency, but posits that there is "a strong future for the likes of Lear;" a big part of Lear's business is in electronics in a time when interactive electronics increasingly become a major selling point for consumers.

Nevertheless, Silver says he's a bit worried about Lear's revenue being concentrated in North America and Europe. He's expecting the Europe market to be relatively weak next year and growth in North America to slow. "Around the globe, production was up 13% during the third quarter and I do not think that is sustainable," he said of the company.

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