Linamar updated August 11, 2019

Linamar is updated and remains rated Strong Buy, now at $37.92. It is in a period of declining earnings. But its valuation seems extremely low in relation to earnings and book value. The near-term stock price is dependent on how trade tensions evolve.

Given the lower price , I would expect management to probably increase the volume of share buy backs. They have been buying back a modest amount of shares in recent months. The dividend is very small. The company is well positioned to increase the dividend if it wanted to but there has been no indication that they plan to. They have a relatively modest debt level and are paying that down. This leaves them well positioned to easily survive the industry slow-down and to make whatever investments they deem appropriate.