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 : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Dave who wrote (23751)	4/16/2006 3:19:33 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78670

I've considered many auto suppliers. Either I can't convince myself that they won't teeter into bankruptcy or else they are niche suppliers that have dominating positions in their field but whose stock seems expensive. For example, self-dimming mirror co. GNTX - now near a 12 month low. The p/e is either absolutely high and not a buy, or else one sees the p/e as relatively low compared to its past and so it is a buy if one strongly weighs the company's apparently sustainable competitive advantage. I've bought and sold this one, and my opinion is that it's not a value play. Others might say it's a beat down growth stock whose story is still intact. Other 'good' niche players I've looked at are that Swedish(?) air bag supplier (dominant position) (Stock moved up while on my watch list and I missed it. Don't recall the name now.); and I've just recently found and passed on a small company which is doing great (and whose stock reflects it) in supplying the perforated/ventilated seats for the heating/cooling seat options on cars. I've had SUP for a while and recently sold at a loss. SUP has good finances (cash, no ltd), but it's suffering two ways: Competitor plants are domiciled in low-wage countries, so SUP is moving there to compete. A chief competitor, HAYZ, is really struggling too - they've got lots of debt - and so the risk is HAYZ cuts margins to the quick to stave off bankruptcy, thus hurting SUP's ability to profit. OTOH, SUP is family controlled, so there's a possibility that at some low SUP price, the insiders may make an offer to buy the company. (I believe there might be a stock buyback in place now too.) I've looked briefly at Lear. It's been suggested here before, and apparently some professional value investors have been buying. To me, Lear, with a d/e ratio of 2, and being a supplier to GM and I believe F, I don't see a margin of safety. It could be there, I'm a little shell-shocked though and maybe can't see it. I've recently taken losses in DRRA (near bankruptcy?), and I've followed (owned) a couple other suppliers right into bankruptcy in past years. So I'm not keen on stocks in this downtrodden sector. (Realizing that MAYBE, now at perhaps max. pessimism, might be the very time to buy them.) I'll go back and look at Johnson Controls though. I've looked briefly at auto parts retailers, but I don't see the bargains there. These chains seem to be everywhere in middle/low income areas - Autozone, Pep Boys, etc. I would assume they are just fighting it out for shares in a saturated market. Perhaps marginally related to auto stocks are the truck manufacturers and suppliers. A cyclical business, and I'm not sure where we are in the cycle. I'm holding NAV and CVGI though. For right now, there doesn't seem to me to be the bankruptcy risk within this sector that is present in the auto sector. finance.yahoo.com I'm still positive on big auto retailers, and I'm still holding several stocks there. Imo, in past couple of years this has been among the best stock performing areas of all sectors in the truck/auto universe. Some auto loan companies have done well too, and some have been acquired by larger companies. (I still hold ACF purchases from '02, '03, '04.) I like auto insurers, and I have a couple there. I've mentioned CGI maybe a dozen or more times over the past years. I'm also holding CPRT in the salvage business, and KAR in the auto auction business. (I wouldn't call either of these latter two a value buy at current prices though.) Oh well, jmo. Paul S., who... is fighting new car fever, and who nevertheless... is making plans to fly out to see the the NYC Auto Show.

To: Dave who wrote (23751)	7/26/2006 1:15:52 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78670

Nice earnings report out from truck supplier CVGI: biz.yahoo.com Upped my few shares just a little today. Your April pick of auto supplier LEA was the better idea. Sorry I could not see it.