Latest news with #shareprice
Globe and Mail
18 hours ago
- Automotive
- Globe and Mail
Magna shares are reeling from tariffs. And they're worth a look
The share price of Magna International Inc. MG-T has been battered over the past several years by rising inflation, rising interest rates and, now, rising tariffs. What will it take to get the share price rising? Capitulation – the point at which just about everyone has given up on a turnaround, signalling that shares may have hit rock bottom – might be the best hope for investors brave enough to bet on a stock that is facing a lot of challenges. From a recent high in 2021, the share price has fallen about 60 per cent. That's a severe dip for one of the world's largest auto parts companies and a key supplier to top vehicle manufacturers in North America, Europe and China. Part of the problem is that vehicle production has run into economic headwinds in recent years, as central banks raised their key interest rates in a battle against surging inflation. Though inflation has subsided, consumer confidence has tanked this year as U.S. tariff policies threaten to disrupt, among other things, the integrated automotive sector. In its latest quarterly results, released in May, Magna said U.S. and European light vehicle production fell 5 per cent and 8 per cent, respectively, year-over-year. Its sales in the first quarter fell 8 per cent from the same period last year. Earnings declined 28 per cent as margins shrank. What's arguably worse for investors, though, is the fear of what's coming. Trade-related chaos and a U.S. policy shift away from incentivizing electric vehicles mean Magna's future performance is difficult to pin down. No wonder the shares trade at just nine times trailing earnings. What's more, the company has taken on a lot of debt since acquiring Veoneer Active Safety for US$1.5-billion in 2023. The purchase increased Magna's leverage ratio – which compares debt to EBITDA, or earnings before interest, taxes, depreciation and amortization – to a lofty 2.5. The company aimed to reduce this ratio to below 1.5 times EBITDA by the end of 2024. That didn't happen. The ratio is currently sitting at 1.9 times EBITDA. Moody's Ratings doesn't expect it to fall to the company's target until the end of 2026 because of weak market conditions. Analysis: Is it time to finally take the dream of a Canadian automaker seriously? Flavio Volpe makes his case Magna has responded by pausing share repurchases 'given the uncertainty that we have in the market,' said chief executive Swamy Kotagiri during a call with analysts last month. One other thing to worry about: Magna's sales are falling faster than the market for light vehicles, which is a troubling development if the market continues to soften. After analysts at CIBC Capital Markets accounted for Magna's geographic sales weighting and excluded its complete vehicle manufacturing, the company still underperformed the market by 1 per cent. Nonetheless, the dismal market conditions that have weighed heavily on Magna's share price may entice some investors looking for a turnaround opportunity. This isn't as outrageously risky as it may appear. The share price bottomed out on April 8, when the S&P/TSX Composite Index also touched its low point for the year. Magna's share price has since rebounded about 17 per cent, suggesting the biggest concerns about tariffs are now fading. Auto parts executive believes U.S. will drop auto tariffs when USMCA renegotiated Indeed, Magna expects that tariffs may not be the huge issue that initially panicked investors. The company estimates the direct tariff impact in 2025 will be about US$250-million, which is less than what some analysts had feared. Even better, Magna expects it can pass along these additional costs to its customers. After this update, Ryan Brinkman, an analyst at J.P. Morgan, raised his 2025 earnings forecast (before interest and taxes) by more than 8 per cent, to US$2.06-billion, and expects the shares to rebound given the low valuation. The lingering issue is what tariffs will do to the vehicle market or, for that matter, the broader economy. Cox Automotive reported last month that the average vehicle transaction price in April increased 2.5 per cent month-over-month, marking one of the sharpest increases in the past decade. That's more bad news for anyone betting on an auto parts company. But with Magna's share price already caught in a four-year slump, the bad news may be adding up to an opportunity.
Bloomberg
2 days ago
- Business
- Bloomberg
Saylor's Bitcoin Copycats Fall Behind as Speculative Pop Fades
Turns out, buying Bitcoin to boost your share price might not be the corporate panacea that it once seemed. In recent weeks, companies such as Trump Media & Technology Group Corp., have announced plans to use their cash — sometimes borrowed — to plow into Bitcoin, joining a growing list of firms adopting an approach pioneered by Strategy 's Michael Saylor.
Yahoo
2 days ago
- Business
- Yahoo
Is Wacker Neuson SE (ETR:WAC) Potentially Undervalued?
Wacker Neuson SE (ETR:WAC), might not be a large cap stock, but it saw a significant share price rise of 34% in the past couple of months on the XTRA. The recent share price gains has brought the company back closer to its yearly peak. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let's examine Wacker Neuson's valuation and outlook in more detail to determine if there's still a bargain opportunity. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. The stock is currently trading at €22.40 on the share market, which means it is overvalued by 33% compared to our intrinsic value of €16.88. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Wacker Neuson's share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market. View our latest analysis for Wacker Neuson Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. Wacker Neuson's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value. Are you a shareholder? It seems like the market has well and truly priced in WAC's positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe WAC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed. Are you a potential investor? If you've been keeping tabs on WAC for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there's no upside from mispricing. However, the optimistic prospect is encouraging for WAC, which means it's worth diving deeper into other factors in order to take advantage of the next price drop. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Wacker Neuson. If you are no longer interested in Wacker Neuson, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
2 days ago
- Business
- Yahoo
Is Wacker Neuson SE (ETR:WAC) Potentially Undervalued?
Wacker Neuson SE (ETR:WAC), might not be a large cap stock, but it saw a significant share price rise of 34% in the past couple of months on the XTRA. The recent share price gains has brought the company back closer to its yearly peak. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let's examine Wacker Neuson's valuation and outlook in more detail to determine if there's still a bargain opportunity. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. The stock is currently trading at €22.40 on the share market, which means it is overvalued by 33% compared to our intrinsic value of €16.88. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Wacker Neuson's share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market. View our latest analysis for Wacker Neuson Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. Wacker Neuson's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value. Are you a shareholder? It seems like the market has well and truly priced in WAC's positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe WAC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed. Are you a potential investor? If you've been keeping tabs on WAC for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there's no upside from mispricing. However, the optimistic prospect is encouraging for WAC, which means it's worth diving deeper into other factors in order to take advantage of the next price drop. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Wacker Neuson. If you are no longer interested in Wacker Neuson, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Acrow (ASX:ACF) shareholders have earned a 36% CAGR over the last five years
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, you can make far more than 100% on a really good stock. One great example is Acrow Limited (ASX:ACF) which saw its share price drive 255% higher over five years. So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). During five years of share price growth, Acrow achieved compound earnings per share (EPS) growth of 46% per year. This EPS growth is higher than the 29% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Acrow's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further. It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Acrow's TSR for the last 5 years was 360%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence! Investors in Acrow had a tough year, with a total loss of 4.6% (including dividends), against a market gain of about 12%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 36%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 4 warning signs for Acrow you should be aware of. Acrow is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
