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Allison Transmission Holdings, Inc. (NYSE: ALSN) – FYE 12/2017 – UNDER VALUED – The stock is currently trading below my most recent $75 fair value estimate. Please See Linked Worksheet
Posted on 03/05/18


Autoliv, Inc. (NYSE: ALV) – FYE 12/2016 – FAIRLY VALUED – The stock is trading at levels in line with my current $109 fair value estimate – Please See Linked Worksheet


BorgWarner, Inc.
Last week, an analyst at RW Baird said he would be a an aggressive buyer of BWA and set a price target of $75. Base on the way the fiscal nature of the markets generally, and given an estimated earnings growth number of 9%, $75 is a fair target…someday. But in world where you and I live, where fundamentals count, where our future retirement dollars live, $75 is not realistic. Net Operating Profit After Taxes (NOPAT) has been averaging around 8% for the past few years, down from an average of 11%. Yes the company has a big year, increasing y-o-y earnings by 420% and y-o-y free cash flow by 300%. But investors should pay closer attention and instead of focusing on the great FY2017 numbers, ask themselves what was so bad about FY2016, and is whatever that was likely to happen again? I mean it is your money, right?

BorgWarner, Inc. (NYSE: BWA) – FYE 12/2017 – FAIRLY VALUED – The stock is currently trading at levels in line with my most recent $49 fair value estimate – Please See Linked Worksheet

Dorman Products, Inc. (Nasdaq: DORM) – FYE 12/2016

Douglas Dynamics, Inc. (Nasdaq: PLOW) – FYE 12/2014

Gentex Corporation (Nasdaq: GNTX) – FYE 12/2016

Johnson Controls, Inc.
2016 was a busy year for the company, buying Tyco International plc, becoming an Irish domiciled company, and then spinning off their automotive business, what a whirlwind. 2017 began the hard work, consolidating what is left into a competitive, cost efficient organization. It is this consolidation period that investors hate and accountants can’t wait for. In the end I did the best I could to determine a fair value for the company and I believe I have done that. The question is, what about tomorrow, what happens going forward? I wish I knew. I must not be alone since yoy the stock price is down 15% and ytd the stock price is down 7% even though the company posted earnings increases of 121% while only growing debt 6%. Over the next couple of years can the stock price get to $75? That is the question I suppose.

Johnson Controls, Inc. (NYSE: JCI) – FYE 09/2017 – FAIRLY VALUED – The stock is currently trading in line with my $38 fair value estimate – Please See Linked Worksheet

Lear Corporation
I get it. The goal of any corporation is to perpetuate itself, to survive at all costs. Yet here is a company that for the last three years has been taking restructuring charges. Restructuring means, a reduction of the work force, layoffs. Restructuring over a time span that includes a 23% average for earning growth, a 28% average for free cash flow growth, and an 8% average for debt growth. Not to mention that the company’s 3 year backlog of sales orders has increased 60% over that same “restructuring” period. If I sound bitter, I’m sorry. But the loss of jobs, even one job, at least to me, is like killing the goose that continues to lay golden eggs. And as I learned long ago, it’s hard to make a cake if you don’t have any eggs.

Lear Corporation (NYSE: LEA) – FYE 12/2017 – FAIRLY VALUED – The stock is trading at levels in line with my current $298 fair value estimate – Please See Linked Worksheet

Lydall, Inc. (NYSE: LDL) – FYE 12/2016

Modine Manufaturing Company, Inc. (NYSE: MOD) – FYE 03/2017

Superior Industries International, Inc. (NYSE: SUP) – FYE 12/2016

Please note that worksheets are updated basis the most current SEC 10-K ANNUAL filing.