Stocks & Investing
Stocks and Investing
Stocks and Investing 
Mon, August 22, 2011
ALV, MTOR, SORL, FSYS, CAAS, SUP, Auto/Truck - OEM Stocks Undervalued
August 22, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Auto/Truck - OEM sector and these stocks are the most undervalued as of today. AUTOLIV INC (NYSE:ALV), MERITOR SAVINGS BANK (NYSE:MTOR), SORL AUTO PARTS INC (NASDAQ:SORL), FUEL SYSTEMS SOLUTIONS INC (NASDAQ:FSYS), CHINA AUTOMOTIVE SYSTEMS INC (NASDAQ:CAAS), SUPERIOR INDUSTRIES INTL (NYSE:SUP) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry
ALV AUTOLIV INC 48.92 78.83 37.90% Undervalued Auto/Truck - OEM
MTOR MERITOR SAVINGS BANK 7.3 19.88 63.30% Undervalued Auto/Truck - OEM
SORL SORL AUTO PARTS INC 3.35 7.41 54.80% Undervalued Auto/Truck - OEM
FSYS FUEL SYSTEMS SOLUTIONS INC 18.41 24.74 25.60% Undervalued Auto/Truck - OEM
CAAS CHINA AUTOMOTIVE SYSTEMS INC 4.75 14.18 66.50% Undervalued Auto/Truck - OEM
SUP SUPERIOR INDUSTRIES INTL 14.45 24.16 40.20% Undervalued Auto/Truck - OEM
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
AUTOLIV INC (NYSE:ALV) - Autoliv, Inc., through its subsidiaries, develops, manufactures, and supplies automotive safety systems to automotive industry. The company offers a range of products, including modules and components for passenger and driver-side airbags, side-impact airbag protection systems, seatbelts, steering wheels, safety electronics, whiplash protection systems, and child seats, as well as night vision systems, radar, and other active safety systems. It markets its products primarily to car manufacturers in Europe, North America, Japan, and the Asia-Pacific. The company was founded in 1956 and is headquartered in Stockholm, Sweden.
MERITOR SAVINGS BANK (NYSE:MTOR) - MERITOR SAVINGS BANK
SORL AUTO PARTS INC (NASDAQ:SORL) - SORL Auto Parts, Inc., through its principal operating subsidiary, Ruili Group Ruian Auto Parts Co., Ltd., engages in the development, manufacture, and distribution of automotive air brake valves, air controlling systems, and other related components for commercial vehicles. The company, through its 90% ownership in Ruili Group Ruian Auto Parts Co., Ltd., a Sino-foreign joint venture, offers various products, including spring brake chamber, clutch servos, air dryers, relay valves, and hand brake valves. It also provides non-valve products comprising power steering pumps and other pumps, automobile electrical components, and auto meters. SORL Auto Parts, Inc. markets its products under the SORL brand to automotive original equipment manufacturers and the related aftermarket customers in the Peoples Republic of China and internationally. The company was founded in 2003 and is headquartered in Ruian City, the Peoples Republic of China.
FUEL SYSTEMS SOLUTIONS INC (NASDAQ:FSYS) - Fuel Systems Solutions, Inc. engages in the design, manufacturing, and supply of alternative fuel components and systems for use in the transportation, industrial, and power generation industries. Its components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas used in internal combustion engines. The company offers a range of fuel delivery components, including pressure regulators, fuel injectors, flow control valves, and other components to control the pressure, flow, and/or metering of gaseous fuels; electronic controls comprising solid-state components and proprietary software that monitor and optimize fuel pressure and flow for engine requirements; and gaseous fueled internal combustion engines. It also provides systems integration support to integrate the gaseous fuel storage, fuel delivery, and/or electronic control components and sub-systems; auxiliary power systems for truck and diesel locomotives; and natural gas compressors and refueling systems for light and heavy duty refueling applications. In addition, the company designs, manufactures, assembles, and markets ancillary components for systems operation on alternative fuels, as well as offers engineering and systems integration services. Fuel Systems Solutions, Inc. supplies its products and systems primarily to automobile manufacturers, taxi companies, transit and shuttle bus companies, and delivery fleets through a network of distributors and dealers, as well as through a sales force that develops sales with distributors, original equipment manufacturers, and end-users. Fuel Systems Solutions, Inc. was incorporated in 2005 and is based in New York, New York.
CHINA AUTOMOTIVE SYSTEMS INC (NASDAQ:CAAS) - China Automotive Systems, Inc., through its interests in Sino-foreign joint ventures, engages in the manufacture and sale of power steering systems and other component parts for the automotive industry in the Peoples Republic of China. It offers a range of steering system parts for passenger automobiles and commercial vehicles. The company provides 4 separate series, 307 models of power steering, including rack and pinion power steering, integral power steering, electronic power steering and manual steering, steering columns, steering oil pumps, and steering hoses. China Automotive Systems, Inc. was founded in 2003 and is headquartered in Jing Zhou City, the Peoples Republic of China.
SUPERIOR INDUSTRIES INTL (NYSE:SUP) - Superior Industries International, Inc. designs, develops, manufactures, sells, and supplies cast aluminum road wheels to automobile and light truck manufacturers primarily in North America. The company was founded in 1957 and is headquartered in Van Nuys, California.
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