The Globe and Mail reports in its Wednesday, Jan. 18, edition that president-elect Donald Trump is
adept at wiping out
shareholder value with his periodic
blurts. The Globe's David Milstead writes that Mr. Trump's latest victims are Magna International
and Linamar. Both stocks fell nearly 4 per cent Monday,
and failed to recover Tuesday,
after Mr. Trump unleashed
yet another attack on foreign automobile
imports.
Magna and Linamar,
already cheap compared with
their U.S. peers, may look even
more like bargains to their advocates,
some of whom call the
stocks their very best investing
ideas for 2017. Investors, however,
should consider whether Mr.
Trump's latest tantrum and the
uncertainty he
continues to inject into the marketplace
represents yet another
risk factor that will help keep the
shares suppressed this year. Magna, Linamar and Martinrea International trade at big
discounts to their U.S.
counterparts, despite the potential, particularly
in the case of Magna, for
above-market growth.
KeyBanc Capital analyst Brett Hoselton rates Magna "outperform" with a $50 (U.S.)
target. He says 2018 "is likely to be a breakout
year" for Magna as sales and
profit margins accelerate.
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