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Magna (MGA) to Divest Fluid Pressure & Controls Business
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Magna International Inc. (MGA - Free Report) announced that its Powertrain unit inked a deal to divest its global Fluid Pressure & Controls (“FP&C”). For this divestiture, the company signed an agreement with Hanon Systems, a global supplier of thermal and energy management systems based in South Korea, for $1.23 billion.
With this divestiture, the Powertrain division of Magna, which is the leading manufacturer and supplier of automotive components, is going to focus more on becoming full-system supplier of transmission and other driveline-related systems.
FP&C under Magna — with about 4,200 employees — designs, manufactures, and supplies mechanical and electronic pumps, cooling fans, and other components. In 2017, FP&C generated sales of $1.4 billion.
Magna’s shareholders are likely to gain from the divestiture of FP&C. This transaction is likely to add to the value of Hanon Systems’ shareholders. Subject to the satisfaction of certain customary closing conditions, the transaction is likely to close in first-quarter 2019.
Over the past year, shares of Magna outperformed the industry it belongs to. Over the time frame, shares of the company have gained 5%, whereas the industry declined 3.7%. Further, Magna has an expected long-term growth rate of 8.5%.
Zacks Rank & Stocks to Consider
Magna currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation (FOXF - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Oshkosh Corporation (OSK - Free Report) . While Fox Factory and Allison Transmission sport a Zacks Rank #1 (Strong Buy), Oshkosh carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory has an expected long-term growth rate of 16.8%. Over a year, shares of the company have soared 68.8%.
Allison Transmission has an expected long-term growth rate of 10%. Over the past year, shares of the company have surged 47.8%.
Oshkosh has an expected long-term growth rate of 18.3%. Over the past three months, shares of the company have risen 9.4%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Magna (MGA) to Divest Fluid Pressure & Controls Business
Magna International Inc. (MGA - Free Report) announced that its Powertrain unit inked a deal to divest its global Fluid Pressure & Controls (“FP&C”). For this divestiture, the company signed an agreement with Hanon Systems, a global supplier of thermal and energy management systems based in South Korea, for $1.23 billion.
With this divestiture, the Powertrain division of Magna, which is the leading manufacturer and supplier of automotive components, is going to focus more on becoming full-system supplier of transmission and other driveline-related systems.
FP&C under Magna — with about 4,200 employees — designs, manufactures, and supplies mechanical and electronic pumps, cooling fans, and other components. In 2017, FP&C generated sales of $1.4 billion.
Magna’s shareholders are likely to gain from the divestiture of FP&C. This transaction is likely to add to the value of Hanon Systems’ shareholders. Subject to the satisfaction of certain customary closing conditions, the transaction is likely to close in first-quarter 2019.
Over the past year, shares of Magna outperformed the industry it belongs to. Over the time frame, shares of the company have gained 5%, whereas the industry declined 3.7%. Further, Magna has an expected long-term growth rate of 8.5%.
Zacks Rank & Stocks to Consider
Magna currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation (FOXF - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Oshkosh Corporation (OSK - Free Report) . While Fox Factory and Allison Transmission sport a Zacks Rank #1 (Strong Buy), Oshkosh carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory has an expected long-term growth rate of 16.8%. Over a year, shares of the company have soared 68.8%.
Allison Transmission has an expected long-term growth rate of 10%. Over the past year, shares of the company have surged 47.8%.
Oshkosh has an expected long-term growth rate of 18.3%. Over the past three months, shares of the company have risen 9.4%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>