I spent more than five years as the editor of a business publication in Greenville, South Carolina, before I came to Florida to work with Adam and Charles.
During my time in the Upstate, business was booming — there was growth everywhere, and BMW North America was responsible for it.
The auto maker’s only U.S. manufacturing facility is there.
French tiremaker Michelin’s North American headquarters is also near Greenville.
Both companies experienced massive growth in production during my time there.
Having those two big manufacturing facilities also spurred growth for their suppliers.
Small companies that built BMW components and Michelin popped up everywhere, and I like the look of one of those supplier’s stocks.
I believe this company will play a big part in the growing electronic vehicle (EV) manufacturing space.
Electric Vehicle Production Is Taking Off
In 2019, the global market size for EVs was just $115 billion.
Research firm Acumen Research and Consulting projects that market size to skyrocket to $567.2 billion by 2026, a massive increase in a short time span.
EV Market to Grow Nearly 400% by 2026
That means more vehicle producers are going to invest in building EVs in hopes of gaining market share.
In 2015, then-BMW Manufacturing Company President Manfred Erlacher told me the company was implementing things like “alternative power engines, hybrids and increased connectivity to the internet.”
Companies like General Motors, Volkswagen and BMW are working to catch up to EV giant Tesla to get a piece of that $567.2 billion pie.
But they can’t do it alone — they need suppliers. That’s where my stock pick comes in.
MGA Will Help Lead Manufacturers in the EV Race
Magna International Inc. (NYSE: MGA) designs, develops and manufactures automotive systems, assemblies, modules and components in North America, Europe and Asia.
Its annual production capacity was nearly 200,000 vehicles in 2018, making it the largest contract manufacturer for vehicles globally.
The company is forging ahead with new production partnerships within the EV space with it:
2020
- Forming a partnership with LG Electronics to supply electric motors, inverters and onboard chargers.
- Striking a deal with EV manufacturer Fisker to produce the Ocean SUV. Fisker forecasted it could build 360,000 vehicles per year by 2025.
2019
- Signing a deal with BAIC Group and the Zhenjiang government to create a joint EV production venture in China. Production capacity could be as many as 180,000 vehicles per year.
- Reaching an agreement with Google affiliate Waymo to help with system integration on an electric vehicle.
These partnerships have pushed Magna’s stock to new heights.
MGA Shares Jump 226% off March 2020 Lows
Magna’s Earnings to Nearly Triple by 2023
Magna’s earnings hit a low of $3.08 per share in 2020. However, forecasts see those earnings topping $9.02 per share in 2023.
That’s a 193% increase in just three years.
Magna International’s Green Zone Story
If we look at Chief Investment Strategist Adam O’Dell’s six-factor Green Zone Ranking system, we see that Magna International ranks a 92 overall.
That means it ranks in the top 10% of all stocks we rate, and we are “Strong Bullish” on the stock.
We expect it to outperform the rest of the market by three times in the next 12 months.
It gets top marks in five of the six factors we rank on:
- Momentum (91).
- Value (90).
- Growth (87).
- Quality (83).
- Volatility (63).
Magna ranks low in size (13) because it has a $21.6 billion market cap.
Fundamental and technical analysis all point to Magna International being a strong company with an already established uptrend.
But now is the time to capitalize before this stock takes off.
Until next time …
Safe trading,
Matt Clark
Research Analyst, Money & Markets
Matt Clark is the research analyst for Money & Markets. He’s the host of our podcast, The Bull & The Bear, as well as the Marijuana Market Update. Before joining the team, he spent 25 years as an investigative journalist and editor — covering everything from politics to business.
