May 17, 2023

Markets rebounded on Wednesday with the S&P 500 up 1.2% – although Toronto was up only 0.3%.

AutoCanada was up 11%. That may have been due to some analyst upgrade. Or it may be related to Statistics Canada reporting this morning that vehicle sales were up sharply in March versus February. But that was likely already known since Desrosiers reports auto sales within a few days after the end of each month. AutoCanada had likely been beaten down too far. Anecdotally I am hearing that many vehicle models are in short supply. Dealers are taking orders rather just selling inventory on the lot. That should be a recipe for much higher markups which can offset the higher interest rates.

Linamar reported its annual meeting voting results today. I clicked on it expecting to see the usual 98 or 99% votes in favor and 1 to 2% withheld. But, surprise, they had four of their six directors get 25 to 37% withheld. Even CEO and founder’s daughter Linda Hazenfratz got 25% withheld. I suspect this is based on some institutional advice groups that think that what matters is having a larger board and having diversity and so-called independent directors. In reality “independent” directors are almost always extremely loyal to the chair and CEO and rarely ever actually act independently in any case. My perception is that Linamar is very well managed and so it’s crazy to be voting against the likes of Linda Hazenfratz – who owns  a massive 33% of the company. I like having a major owner is charge. And if you have ever heard her speak you will know she earned her position as CEO.

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