S&P Equity Research Picks MGA Focus Stock of the Week
NEW YORK, Sept. 21 /PRNewswire/ -- Magna International, Inc. (MGA: $79) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. MGA carries S&P's highest investment recommendation of 5-STARS, or Strong Buy.
"Magna makes a diversified line of automotive components and systems, mainly for General Motors, Ford (F: $13, Hold), and Chrysler," said Efraim Levy, Auto Manufacturers & Parts Equity Analyst at Standard & Poor's Equity Research. "Our recommendation is based on the company's business model, which is focused on achieving steady, incremental sales gains while expanding profits and maintaining a conservative balance sheet, as well as our view that MGA stock has compelling appreciation potential. We expect the company to generate about $23 billion in revenue in 2010 and $25 billion in 2011."
Levy believes Magna's solid balance sheet, with $1.7 billion in cash and equivalents and $84 million in long-term debt as of June 30, 2010, and track record of generally rising sales, profits, and cash flow warrant a price-to-earnings multiple above the recent level of 9.7 times S&P's 2011 EPS estimate of $8.02. Levy thinks industry and MGA price-to-earnings multiples should expand on market anticipation of the industry volume improvements that S&P expects in 2011 and beyond.
To view a video of Mr. Levy discussing Magna International, Inc., paste the following link into your browser.
Also available here: http://tinyurl.com/27mcdzk
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S&P Global STARS Distribution
In North America
As of June 30, 2010, research analysts at Standard & Poor's Equity Research Services North America recommended 38.2% of issuers with buy recommendations, 52.2% with hold recommendations and 9.6% with sell recommendations.
In Europe
As of June 30, 2010, research analysts at Standard & Poor's Equity Research Services Europe recommended 35.7% of issuers with buy recommendations, 40.7% with hold recommendations and 23.6% with sell recommendations.
In Asia
As of June 30, 2010 research analysts at Standard & Poor's Equity Research Services Asia recommended 45.3% of issuers with buy recommendations, 48.3% with hold recommendations and 6.4% with sell recommendations.
Globally
As of June 30, 2010, research analysts at Standard & Poor's Equity Research Services globally recommended 38.4% of issuers with buy recommendations, 49.8% with hold recommendations and 11.8% with sell recommendations.
5-STARS (Strong Buy): Total return is expected to outperform the total return of a relevant benchmark, by a wide margin over the coming 12 months, with shares rising in price on an absolute basis.
4-STARS (Buy): Total return is expected to outperform the total return of a relevant benchmark over the coming 12 months, with shares rising in price on an absolute basis.
3-STARS (Hold): Total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis.
2-STARS (Sell): Total return is expected to underperform the total return of a relevant benchmark over the coming 12 months, and the share price is not anticipated to show a gain.
1-STARS (Strong Sell): Total return is expected to underperform the total return of a relevant benchmark by a wide margin over the coming 12 months, with shares falling in price on an absolute basis.
Relevant benchmarks: In North America, the relevant benchmark is the S&P 500 Index, in Europe and in Asia, the relevant benchmarks are generally the S&P Europe 350 Index and the S&P Asia 50 Index.
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SOURCE Standard & Poor's
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