I've never understood why so many people weren't interested in Linamar.
The stock has been very cheap for a while.
EPS growth has been steady and very good for a while.
The ROE has been great (around 20) for a while.
The company has a very moderate debt.
It's not a regulated sector (auto parts).
Everything is there.
But, some people say that the income of the CEO is too high (for those who can read french).
I've never really cared about the income of any CEO. They're almost all overpaid. What about an over-overpaid CEO? I don't care about it if the performance of the stock and the numbers behind the stock are good. I mean, OK, it's immoral to earn 14 million dollars a year while ethiopians are drinking water full of worms and shit. But we live in an immoral world where we kill billions of male baby chicken every year because they're worthless (it's true, just check on the Internet). We let stupid people reproduce, thus spreading stupidity and misery around us. There's 10 billion things more immoral as a fucking CEO who earns 14 millions dollars a year and we all tolerate them because of our system of values which I don't share. So, I don't give a fuck about total compensation.
Anyway, take a look at that list. The richest CEO's in Canada are there. You'll see that the king of motherfuckers, Mike Pearson (Valeant), is well ahead everybody. Then, you have Hunter Harrisson (CP.TO), Mark Barrenechea (OTEX.TO), Brian Hannasch (ATD-B.TO), and, at number 8, you get Linda Hasenfratz (LNR.TO) with a total compensation of about 14 million dollars a year. It's a lot, but, if the total compensation was a reason not to invest in a stock, I wouldn't own Alimentation Couche-Tard and I wouldn't be thinking of owning Open Text.
Both business are great. They're surely among the top 10 in Canada.
And I won't buy shares of Blackberry just because the CEO is number 91 on the list.
LNR.TO is up about 22% this year. It's a good perfomance. And you didn't have to be a fucking genius to select that stock 6-7 months ago. But you were afraid of the peak of auto sales. Because you're always afraid of something. But you were not afraid of following Ackman with his giga-stupid move of investing in Shitpotle Mexican Grill. And you weren't afraid of buying CRH Medical at something like 50 times actual earnings. Because they're not "cyclical stocks".
I don't think that LNR is the best stock in the world. But it was a safe bet (it's probably still a safe bet) and a logical choice in my opinion. That's a company that makes money, year after year and that's not overvalued at all. Much better than all those stocks that need a serious turn-around or that surf on some crazy fucking hype.