Lear Story

Lear Corporation -- USA Stock  

USD 190.25  0.93  0.49%

Macroaxis News
  
By David Taylor

The Lear Corp. is an automotive components manufacturer.  They focus on seating and electronic components and are out of Detroit, MI. (No relation to the company that makes Lear Jets).  

I am bullish on the auto industry.  Our economy is expanding and is witnessed by the fact that the U.S. Federal Reserve is likely to raise interest rates later this week.  The auto industry was hit very severely during the financial crises of 2008.  Since then, the entire auto industry has had to cut back on costs, trimming down to the very barest of essentials.  The industry has become very efficient and is also starting to become very profitable.  

 

Automobiles and Trucks
Fama & French Classification
Secondtier auto supply companies can be hidden gems such as this company.

 

I have been bullish on the auto industry for some time. The economy in the United States is expanding.  Interest rates are heading higher.  There will be a strong push for automakers to sell more cars over the next year before interest rates make buying a new car cost more expensive.  Second-tier auto suppliers will do well in that environment.  




The Lear Corp. is an automotive components manufacturer.  They focus on seating and electronic components and are out of Detroit, MI. (No relation to the company that makes Lear Jets).  

I am bullish on the auto industry.  Our economy is expanding and is witnessed by the fact that the U.S. Federal Reserve is likely to raise interest rates later this week.  The auto industry was hit very severely during the financial crises of 2008.  Since then, the entire auto industry has had to cut back on costs, trimming down to the very barest of essentials.  The industry has become very efficient and is also starting to become very profitable.  

Lear Corp. would be a second-tier auto company.  When most investors think about the auto industry and investing in it, they usually look towards the major automakers themselves, not the suppliers.  But, there are some real opportunities here.  As the industry expands and becomes more profitable certain parts makers are going to follow suit.  Lear Corp is one that I believe is going to prove a winner.  

Taking a look at earnings shows you what I mean:

2011:    $5.21

2012:  $13.04

2013:    $5.07

2014:    $8.39

2015:    $9.71

2016:  $12.92 (projected)

While there was a bit of a jump in 2012 these are earnings that I like to see.  They are progressively getting larger.  And, something else that is very important to me is the earnings-per-share.  The stock is trading at about ten-times earnings, about $135 per share based on projected earnings for this year.  

And, the past few years the earnings increase has been about 18% average increase.  That puts the stock positioned to advance significantly.  First, the rest of the industry is trading about 15-times earnings, whereas, as mentioned, LEA is lagging behind at 10 times.  Factoring two consecutive earnings increases of 18% in the next two years and that puts earnings at about $18 a share pushing the stock price to $180 per share, up almost 50% given this math.  Plus, if LEA were to catch up to the rest of the industry and get to 15 times earnings that pushes the stock price to $270.00 per share.  

These numbers seem high.  But, think about it:  the economy is advancing enough to push the hand of the Federal Reserve.  That means higher interest rates.  Automakers are going to start pushing their advertising telling Americans that they need to move now to take advantage of the lowest interest rates they are likely to ever see again.  That means bigger sales.  That means a second-tier auto manufacturing company will benefit equally.  And, these other auto industry manufacturers are already starting to push to higher earnings per share ratios.  

I feel very strongly about the potential of a continued strengthening of the overall economy and what that means to various sectors.  The auto industry, having been hit as hard as it was during the financial crisis will benefit with the economic expansion.  And, it will do so and catch up to the rest of the economy and the market.  Most of the equity market is trading at a much higher ratio than LEA and this industry.  It is my belief that the lag in the auto industry has everything to do with the turbulence from the financial crisis, but this trend will turn.  

Given a couple of years this stock will turn and do very well.  This industry will prove to be a good investment.  

Story Momentum

This article from Macroaxis published on 19 of December contributed to the next trading period price escalation.The trading delta at closing time to the next next day price was 0.67% . The trading delta at closing time when the story was published to current price is 40.68% .

Similar stores for Lear

2 days ago at www.macroaxis.com 
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Macroaxis News
Filed transaction by Lear Corp officer. Exercise or conversion of derivative security exempted pursuant to Rule 16b-3
over a month ago at http://finnewsweek.com 
Lear Corporation Analysis and Yield Review
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After a recent scan, we can see that Lear Corporation has a Shareholder Yield of 0.060432 and a Shareholder Yield of 0.04766.
over two months ago at http://www.nwitimes.com 
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nwitimes.com - Nov 1, 2017 We39re pleased to be able to combine our operations into a single modern facility, which will optimize our ability to deliver the highest quality Lear seats to Ford Motor Company, said Ray Scott, executive vice president of Lear Corporation and ... City of Hammond and Lear Corporation Celebrate Groundbreaking of New Facility - ValpoLife.com
over three months ago at http://www.equities.com 
Lear Corporation Moves Higher on Volume Spike for September 15
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Lear Corporation traded on unusually high volume on Sep. 15, as the stock gained 2.24 percent to close at 167.17. On the day, Lear Corporation saw 1.34 million shares trade hands on 13,112 trades. Considering that the stock averages only a daily volume ... Lear Corporation Receives 149.30 Average PT from Analysts - The Ledger Gazette Lear Corporation Checking the Operational Data - StockNewsGazette

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Lear is currently under evaluation in profit margin category among related companies. Profit Margin measures overall efficiency of a company and shows its ability to withstand competition as well as defend against adverse conditions such as rising costs, falling prices, decline in sales or management distress. Profit margin tells investors how well the company executes on its overall pricing strategies as well as how effective the company in controlling its costs.