Undervaluation [compared with sector average]: Price/Earnings and Earnings Yield + Price/Earnings of 11.6. We estimate Magna International stock is trading at a current year P/E of 9.6 and a forward year P/E of 7.8. The P/E of 11.6 plus annual inflation in the Canada of 5.8% adds up to 17.4, well within the value benchmark Rule of 19. + Earnings yield of 8.6% is 2.3 times the 10-year bond yield of 3.79%. Price to Book + Price to Book of 2 [2.2]. We estimate Magna International stock is trading at a current year Price to Book of 2.1 and a forward year Price to Book of 1.6. Price to EBITDA + Price to EBITDA of 4.5 [6.1]. MCap/Total Assets + Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.4. Compared with the rest of the market the stock is undervalued and ranks in the top quartile of stock by value of Q Ratio.
Undervaluation Indicator and rank of Magna International in the Canadian market:
Description
Value
Rank In Market
Price to Sales
0.3
In Top 13%
Uptrend: Past Week: + Magna International Inc. is placed 278/1004 in BuySellSignals' ranking of Canadian performers in the past week, a percentile ranking of 72. + In the past week, volume was 1.0 times average and the shares were up 2.3%. Wednesday's close price is at a 0.5% premium to its 5-day Volume Weighted Average Price (VWAP) of CAD67.09.
High Price Performance Indicators and rank of Magna International in the Canadian market:
Description
MG Value
Rank In Market
Today's Trading Turnover
CAD68.8 million ($50.3 million)
In Top 3%
MCap
CAD19.3 billion
In Top 6%
BEARISH SIGNALS
Overvaluation [compared with sector average]: Dividend Yield + To quote Benjamin Graham: "A dividend yield of at least two-thirds the triple-A bond yield"; the stock's dividend yield equals the triple-A bond yield of 3.8%. + The relative yield of MG, defined by its yield of 3.7%, divided by average yield of dividend yielding stocks in the S&P/TSX 60 Index of 3.9% is 96.6%. This suggests Magna International stock is overvalued in dividend yield terms.
Downtrend: Price/Moving Average Price and MACD: + The Price/MAP of 0.91 for MG is lower than the Price/MAP for the S&P/TSX 60 Index of 1.12. + The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 68.16 minus the 26-day EMA of 69.7 is negative suggesting a bearish signal. Both the 12-day EMA as well as the 26-day EMA are falling, another bearish signal. + The price to 50-day EMAP ratio is 0.9, a bearish indicator. In the past 50 days this ratio has been under 0.9 just five times suggesting a support level. The 50-day EMAP has decreased to CAD71.14. A decrease is another bearish indicator. + The price to 200-day MAP ratio is 0.91, a bearish indicator. In the past 200 days this ratio has been under 0.91 just seven times suggesting a support level. The stock is trading below both its MAPs and the 50-day MAP of CAD71.72 is lower than the 200-day MAP of CAD73.81, a bearish indicator. The 200-day MAP has decreased to CAD73.81. A decrease is another bearish indicator. Past Month: + The price slid 9.6% in the past month. + Compared with the S&P/TSX 60 Index which fell 0.3% for the month, this represented a relative price decrease for Magna International's stock of 8.7% for the month. + Falls to Rises: in the past month the number of falls outnumbered rises 14:8 or 1.8:1. Slipping Relative Strength (1mo, 3 mo): + In the Canadian market of 1,019 stocks and 25 units traded today, the stock has a 6-month relative strength of 35 which means it has underperformed 65.0% of the market. + Also, the relative strength percentile is slipping at 25 for 3 months and 16 for 1 month.