Trade-Ideas: Magna International (MGA) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Magna International ( MGA) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Magna International as such a stock due to the following factors:

  • MGA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $89.4 million.
  • MGA has traded 69,105 shares today.
  • MGA is trading at a new lifetime high.

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More details on MGA:

Magna International Inc. develops, manufactures, engineers, supplies, and sells automotive products. It operates through North America, Europe, Asia, and Rest of World segments. The stock currently has a dividend yield of 1.6%. MGA has a PE ratio of 15. Currently there are 8 analysts that rate Magna International a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Magna International has been 1.3 million shares per day over the past 30 days. Magna International has a market cap of $23.0 billion and is part of the services sector and wholesale industry. Shares are up 5.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Magna International as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • MAGNA INTERNATIONAL INC has improved earnings per share by 27.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MAGNA INTERNATIONAL INC increased its bottom line by earning $4.36 versus $3.39 in the prior year. This year, the market expects an improvement in earnings ($4.65 versus $4.36).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Auto Components industry average. The net income increased by 18.3% when compared to the same quarter one year prior, going from $393.00 million to $465.00 million.
  • MGA's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.

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