Value
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.8 |
| P/S | 10.0 |
| EV/EBITDA | 8.6 |
| Fwd P/E | 9.5 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 8.3x
- ▸PEG: 0.39
- ▸Attractively valued
MGA · Why this verdict
Why Magna International (MGA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Trading at a forward P/E of 8.8 times and a PEG of 0.39, the stock screens attractively on valuation, offering a potential margin of safety if earnings hold. Valuation breakdown | Forward P/E remains below 10x and PEG stays under 0.5 over the next four quarters, preserving the valuation cushion. | →Stable |
| CounterAnalysts have set consensus targets implying the stock has already exceeded fair value, and a low multiple without a catalyst to expand it provides no near-term price driver. | ||
Free cash flow running at 309% relative to reported net income signals that the business is generating substantially more cash than earnings reflect, providing a buffer for dividends and balance sheet flexibility. Quality breakdown | Free cash flow as a percentage of net income remains above 200% over the next four quarters. | →Stable |
| CounterA yield flagged as potentially uncovered suggests the dividend may be stretching payout beyond sustainable levels, and elevated FCF ratios can reflect timing effects rather than permanent cash generation capacity. | ||
With quality at 3.7 — below the 4.0 minimum threshold — the business does not yet meet the foundational bar required for a full position, limiting conviction until fundamentals improve. Bear case | EPS surprise exceeds 15% for 3 consecutive quarters, signaling a meaningful operational recovery. | →Stable |
| CounterThree of the last four quarters produced earnings beats, including a 36% positive surprise in the most recent quarter, suggesting quality metrics may be in the early stages of recovery. | ||
A put/call ratio of 1.69 paired with implied volatility at 69% reflects elevated hedging demand, signaling that market participants are positioned defensively against near-term downside. Risk breakdown | Put/call ratio falls below 1.0 and implied volatility compresses below 40% over the next two months. | →Stable |
| CounterElevated put/call ratios can also reflect institutional protection of existing long positions rather than purely directional bearish bets, potentially overstating near-term downside probability. | ||
Trading at a forward P/E of 8.8 times and a PEG of 0.39, the stock screens attractively on valuation, offering a potential margin of safety if earnings hold.
→StableValuation breakdown
- Expectation
- Forward P/E remains below 10x and PEG stays under 0.5 over the next four quarters, preserving the valuation cushion.
CounterAnalysts have set consensus targets implying the stock has already exceeded fair value, and a low multiple without a catalyst to expand it provides no near-term price driver.
Free cash flow running at 309% relative to reported net income signals that the business is generating substantially more cash than earnings reflect, providing a buffer for dividends and balance sheet flexibility.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 200% over the next four quarters.
CounterA yield flagged as potentially uncovered suggests the dividend may be stretching payout beyond sustainable levels, and elevated FCF ratios can reflect timing effects rather than permanent cash generation capacity.
With quality at 3.7 — below the 4.0 minimum threshold — the business does not yet meet the foundational bar required for a full position, limiting conviction until fundamentals improve.
→StableBear case
- Expectation
- EPS surprise exceeds 15% for 3 consecutive quarters, signaling a meaningful operational recovery.
CounterThree of the last four quarters produced earnings beats, including a 36% positive surprise in the most recent quarter, suggesting quality metrics may be in the early stages of recovery.
A put/call ratio of 1.69 paired with implied volatility at 69% reflects elevated hedging demand, signaling that market participants are positioned defensively against near-term downside.
→StableRisk breakdown
- Expectation
- Put/call ratio falls below 1.0 and implied volatility compresses below 40% over the next two months.
CounterElevated put/call ratios can also reflect institutional protection of existing long positions rather than purely directional bearish bets, potentially overstating near-term downside probability.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cheap on fundamentals and generating exceptional free cash flow, but business quality sits below the minimum acceptable threshold and options market positioning reflects meaningful near-term uncertainty — the setup is not compelling for new capital.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.0 |
| ROA | 2.9 |
| Gross margin | 0.0 |
| Op margin | 1.7 |
| Net margin | 0.8 |
| Current ratio | 4.7 |
| FCF quality | 10.0 |
| Moat | 4.5 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 309% FCF/NI
- ▸No competitive moat
Growth
3.3/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.3 |
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.7 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 4.9 |
- ▸Uptrend pullback (RSI 38) - buy opportunity
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.4 |
| Price target | 6.6 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
3.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 3.7 |
| growth rank | 2.6 |
Technical
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 8.8 |
| 52w position | 8.1 |
| gap | 5.0 |
Risk (lower is worse)
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.7 |
| days to cover | 3.7 |
| volatility | 5.1 |
| put call | 0.0 |
| implied vol | 5.3 |
| max pain risk | 3.0 |
| beta | 3.8 |
| debt equity | 7.7 |
- ▸Elevated put/call: 3.12
- ▸Above max pain $48
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 3.5 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:5.3>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.0=NEGATIVE
Warning (1)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.02
Upside
-0.1%
Downside
5.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 28d with 4/4 beat streak
SuitabilityAggressive — Beta 1.85>1.3
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Technical at 8.0 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.0=NEGATIVE.
The strongest dimensions are Technical at 8.0, Value at 7.8, and Catalyst at 6.7; the weakest are Peer rank at 3.0, Growth at 3.3, and Quality at 3.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.02 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Multiples
Trip ifForward P/E expands above 15x for 2 consecutive quarters.
- P2Strong Free Cash Conversion
Trip ifFree cash flow falls below 150% of net income for 2 consecutive quarters.
- P3Quality Below Minimum Threshold
Trip ifEPS surprise exceeds 15% for 3 consecutive quarters.
- P4Elevated Options Market Hedging
Trip ifPut/call ratio falls below 0.8 for 2 consecutive months.