Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Range Bound & Undervalued Quality Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Esway who wrote (544)	1/13/2000 11:19:00 PM
From: Esway	Read Replies (2) \| Respond to of 5499

DPH some good comments: Delphi Automotive Systems (DPH), the nation's largest auto-parts maker that was spun off from General Motors (GM) last year, has held on to last week's 12% gain as analysts gather in Detroit for this week's North American International Auto Show. The stock got a boost last Friday when Donaldson, Lufkin & Jenrette analyst Wendy Beale Needham upgraded seven other auto-parts makers because the group is bound to benefit from money flowing into beaten-down cyclical stocks (see story). What's more, Needham expects fourth-quarter earnings for the group to rise about 18%, reflecting a "blowout quarter for new car and truck production and sales." Earnings at Delphi, which makes everything from brakes and engines to electrical and steering systems, are expected to be 44 cents a share, down from 53 cents a share a year ago. But fourth-quarter 1998 earnings were inflated by GM's production ramp-up after a two-month strike in 1998, as well as by a few businesses that have since been spun off. Adjusting for the rebound from the strike, Needham figures earnings will increase about 37%, thanks to lower overhead and interest expense. Delphi gets roughly 80% of its business from GM, but that portion should shrink as the company expands its customer base. Delphi seems to be staying on a fast track despite forecasts of lower auto sales this year. Just in the last week, Delphi got $2.5 billion worth of orders from seven customers for in-car navigation, computer, communications and entertainment systems; closed the $875 million acquisition of TRW's (TRW) diesel-systems unit; and will invest more than $25 million in two facilities in Brazil. "To-date, the company has delivered on its promises and has met or exceeded its stated financial objectives," said Needham in a recent note. All of the 13 analysts who cover the stock rate it a Strong Buy or Buy. Earlier this week, Raymond James investment strategist Jeffrey Saut said Delphi stock is "interesting since we think that the electronics division alone is worth more than the current share price." Right now, the stock trades at just under nine times this year's earnings forecast of $2.03 a share. That's a shade below the company's long-term annual earnings growth rate of 10%. smartmoney.com