Why Nobody Talks About the Most Important Part of an EV
When you think of electric cars, you probably picture Tesla or Rivian. But here's a secret: companies making the actual parts are often better investments. Let's break down why Magna International (MG) scores 5.2/7 in our system:
1. They Build Almost Everything (But You've Never Heard of Them)
- Makes parts for Ford, Toyota, AND Tesla
- Key products:
- Battery frames (the "skeleton" holding EV batteries)
- Camera systems for self-driving cars
- Even entire car bodies for some brands
2. The Numbers That Matter
- Dividend: 3% yield (that's $1.54 per share yearly)
- Valuation: Trades at 8x earnings vs. 15x for competitors
- Growth: Expected to grow profits 12%/year through 2027
3. What Could Go Wrong?
- If EV sales slow, orders could drop
- New competitors in China
How We'd Trade It
- Buy Zone: $48-$52
- Price Target: $65 by end of 2025
- Stop Loss: $45 (about 10% downside risk)
"Think of MG like the company selling shovels during a gold rush. They profit no matter which car brand wins."
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