Welcome to the Stock of the Day.
The benchmark indices are off over 200 points today on tremors out of the Ukraine, but that did nothing to stall Magna International (MGA), as Magna stock just soared to an all-time high on strong fourth-quarter results. Is there upside left for MGA? Find out today.
Magna International is a leading supplier to the auto industry. Based in Ontario, Magna International provides services ranging from vehicle engineering and assembly to production of exterior trim and building interior door panels. Fiat—including Chrysler and Dodge—Ford (F) and General Motors (GM) are all long-time clients of Magna.
Magna stock shares rose on Monday after the auto parts wholesaler posted higher profit in the fourth quarter as it continued to thrive in North America and improved operations in Europe. Compared with Q4 2012, net income advanced 35% to $458 million, or $2.03 per share. Analysts had predicted earnings of $1.54 per share so Magna International posted a 32% earnings surprise. Over the same period, sales jumped 14% to $9.17 billion, also topping the $8.87 billion consensus estimate.
Magna International reaffirmed its sales guidance for 2014. The company sees total sales in a range of $33.8 billion and $35.5 billion. While this missed the $35.73 billion consensus estimate by a whisker Wall Street shrugged this off. Magna International also has declared a quarterly dividend of 38 cents per share, a 19% increase over last quarter. Shareholders of record on March 14 will be paid on March 28.
All-in-all, this was a solid report.
Before you buy any stock, you should always run it through my free Portfolio Grader ratings system. This Conservative stock has been at a buy for the past 12 months running. And with the latest results I don’t expect that to change anytime soon. MGA receives an A for its Quantitative Grade and a B for its Fundamental Grade.
Bottom Line: As of this posting I consider Magna stock an A-rated Strong Buy.