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  5. LNR: I would appreciate your assessment of this company both in terms of the recent earnings report and future prospects. [Linamar Corporation]
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Investment Q&A

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Q: I would appreciate your assessment of this company both in terms of the recent earnings report and future prospects. They mentioned that there are supply bottlenecks and cost inflation of labor, materials and energy that are affecting their results. So how do you see these being resolved and when? Would you be a buyer of these shares after Friday's drop? Please provide rationale for your position. Thanks.

Asked by John on November 08, 2021
5i Research Answer:

EPS of ($0.21) missed expectations of $0.2316 and revenue of $848.5M missed expectations of $892.31M. The company's results were negatively impacted by cost inflation of labour, materials and energy. Conversely, the company also noted strong demand for vehicles and a strong long-term outlook for the company. The company has a good equity position and cash balance, however, its debt has been increasing and its liquidity has been slipping as a result. Although almost every company has been experiencing margin squeezes or revenue declines due to supply chain issues, we see MRE's earnings miss as much larger than expected even with supply chain issues. We would likely side with either MG or LNR today, due to their historically strong performances and fundamentals.