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$$$MR. MARKET$$$ Loves AXL
by: mr_market63 (42/M)
Long-Term Sentiment: Strong Buy 05/20/02 10:18 am
Msg: 495 of 652
You axed for it, you got it. The next $$$MR. MARKET$$$ winner is AXL. I bought AXL today at $34.73. I will sell it in 4 to 6 weeks at 40.25. Here is why I like AXL:
AXL is up 170% in the last 52 weeks. That is very good price momentum for a company carrying a P/E of only 13. The most phenomenal thing about AXL is its R^2 correlation coefficient in the time series regression. When plotted since last September, AXL has an R^2 of 0.97. That’s almost perfect!
Price to sales ratio of 0.54…a very good value, especially for a company with over 3 billion in sales.
AXL’s return on equity is a stunning 26%…compared to 5% for its peers. Shareholders should be very pleased.
In April, the company noted that it had been awarded a contract to produce precision machined components for a new Ford Amazon passenger car. The deal marked AXL's first opportunity to work with Ford South America Operations, and supports the company's continuing customer diversification strategy. This is clearly fuel for further growth. New growth creates positive stock price appreciation. Institutions only own 35% of this stock meaning that a lot more big boys can be buying. Typically, institutions have more flexibility to buy more shares of larger capitalized companies.
From March 1994 through December 2001, the company made about $1.9 billion of capital expenditures. As a result, the average number of axles produced daily increased from about 10,000 in March 1994 to about 15,750 in 2001. Increasing production of 50% over old money spent means that as the depreciation hits the earnings statement, cash flows get fatter and fatter. . Much of the stock's performance to date has been due to the rise in GM's truck production and improving cash flow generation. Operating income increased 36% to $72.5 million, reflecting the higher sales and gross profit margin improvement. 2002 EPS estimates have recently been raised to $2.87 and 2003 remains the same at $3.18.
"On March 8, we were the first auto supplier to raise guidance for the quarter and we are very pleased to deliver earnings that are slightly ahead of that guidance. AAM's earning per share growth of 47% versus the first quarter of 2001 resulted from strong sales, increased margins and reduced costs. The 36% growth in operating income was a result of volume and content increases coupled with significant productivity improvements and our continued focus on tight cost controls. We also had a significant improvement in our cash flow in the first quarter of 2002, and we project to be cash flow positive from operations for the entire 2002 calendar year," said American Axle & Manufacturing Co-Founder, Chairman of the Board & CEO Richard E. Dauch.
If this guy is pleased with beating the street, you can bet for sure that his ego won’t allow him to falter in the next quarter. There is nothing in the economy that would indicate that they will miss. In the last 4 quarters, they have surprised by an average upside of 10%. This means that the analyst number of $2.87/share will probably end up being $3.16 in 2002. If you multiply $3.16 times their present P/E of 13.34, you get a share price of $42.15. Well past my sell target. This is why I am so HUGE!!
Bring me your finest meats and cheeses!
$$$MR. MARKET$$$
by: mr_market63 (42/M)
Long-Term Sentiment: Strong Buy 05/20/02 10:18 am
Msg: 495 of 652
You axed for it, you got it. The next $$$MR. MARKET$$$ winner is AXL. I bought AXL today at $34.73. I will sell it in 4 to 6 weeks at 40.25. Here is why I like AXL:
AXL is up 170% in the last 52 weeks. That is very good price momentum for a company carrying a P/E of only 13. The most phenomenal thing about AXL is its R^2 correlation coefficient in the time series regression. When plotted since last September, AXL has an R^2 of 0.97. That’s almost perfect!
Price to sales ratio of 0.54…a very good value, especially for a company with over 3 billion in sales.
AXL’s return on equity is a stunning 26%…compared to 5% for its peers. Shareholders should be very pleased.
In April, the company noted that it had been awarded a contract to produce precision machined components for a new Ford Amazon passenger car. The deal marked AXL's first opportunity to work with Ford South America Operations, and supports the company's continuing customer diversification strategy. This is clearly fuel for further growth. New growth creates positive stock price appreciation. Institutions only own 35% of this stock meaning that a lot more big boys can be buying. Typically, institutions have more flexibility to buy more shares of larger capitalized companies.
From March 1994 through December 2001, the company made about $1.9 billion of capital expenditures. As a result, the average number of axles produced daily increased from about 10,000 in March 1994 to about 15,750 in 2001. Increasing production of 50% over old money spent means that as the depreciation hits the earnings statement, cash flows get fatter and fatter. . Much of the stock's performance to date has been due to the rise in GM's truck production and improving cash flow generation. Operating income increased 36% to $72.5 million, reflecting the higher sales and gross profit margin improvement. 2002 EPS estimates have recently been raised to $2.87 and 2003 remains the same at $3.18.
"On March 8, we were the first auto supplier to raise guidance for the quarter and we are very pleased to deliver earnings that are slightly ahead of that guidance. AAM's earning per share growth of 47% versus the first quarter of 2001 resulted from strong sales, increased margins and reduced costs. The 36% growth in operating income was a result of volume and content increases coupled with significant productivity improvements and our continued focus on tight cost controls. We also had a significant improvement in our cash flow in the first quarter of 2002, and we project to be cash flow positive from operations for the entire 2002 calendar year," said American Axle & Manufacturing Co-Founder, Chairman of the Board & CEO Richard E. Dauch.
If this guy is pleased with beating the street, you can bet for sure that his ego won’t allow him to falter in the next quarter. There is nothing in the economy that would indicate that they will miss. In the last 4 quarters, they have surprised by an average upside of 10%. This means that the analyst number of $2.87/share will probably end up being $3.16 in 2002. If you multiply $3.16 times their present P/E of 13.34, you get a share price of $42.15. Well past my sell target. This is why I am so HUGE!!
Bring me your finest meats and cheeses!
$$$MR. MARKET$$$
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