EARNINGS ROUNDUP: A Closer Look Under The Hood of Some Small-Cap Auto Industry Suppliers May Reveal Opportunities

STOP!  Before you write off the auto industry completely, you might want to take a closer look under the hood of some of the “new” and some of the longstanding small-cap auto industry suppliers.  There just may be some companies in this group of beaten down small-cap stocks that you may decide you want to buy instead of sell.  

 It’s no surprise with global vehicle sales in free-fall that a roundup of the recent financial results of most suppliers of parts and systems to auto industry OEMs paints a rather bleak picture.  Such stalwarts as American Axel, Lear, Tenneco, Visteon and others have reported steep declines in sales, mounting losses and persistent declines in market cap causing some of them to fall from the ranks of the mid- and large-caps to the ever increasing roster of small- and micro-caps.  At these significantly reduced valuations one or two of the better capitalized of this group might soon become attractive.

 In addition to some from the above group of “newly minted” small-cap entries, you might also want to test drive one or more of the following small-cap auto industry suppliers:

  • Gentex (Nasdaq: GNTX) – calendar year 2008 net sales were $623.8 million compared with $653.9 million in 2007.  EPS per diluted share in 2008 was $0. 44 vs. $0.85 in 2007 http://www.easyir.com/easyir/prssrel.do?easyirid=74B343E1F282071F&version=live&prid=469614.  Gentex stock closed today at $8.23, down from its 52-week high of $19.47
  • Amerigon Incorporated (Nasdaq: ARGN) – 2008 product revenues were $63.6 million, level with 2007 product revenues.  EPS for 2008 was $0.16 per basic and diluted share, vs. $0.34 per basic and $0.33 per diluted share for 2007 http://www.amerigon.com/investors.php. Amerigon’s stock closed at $3.03 today down from a 52-week high of $19.01
  • Superior Industries (NYSE: SUP) – net sales for 2008 were $754.9 million down 21% from $956.9 million for 2007.  Loss per share for 2008 was $0.98 per share vs. net income per diluted share of $0.35 for 2007 http://www.supind.com/news/4QTR-08.aspx.  Superior Industries stock closed today at $8.54 down from its 52-week high of $23.04
  • Williams Controls, Inc (Nasdaq: WMCO) – net sales for fiscal year ended September 30, 2008 were $65.8 million compared with $68.9 million in fiscal 2007.   Fiscal 2008 EPS was $1.01 per diluted share vs. $1.03 per diluted share for the prior fiscal year http://www.wmco.com/news/Press_Release_-Q4__FYE_2008_v4.pdf.  Williams Controls stock closed at $5.67 today down from a 52-week high of $15.50

Many of these companies have good customer bases, strong cash balances, little or no long-term debt and diversified product lines, some of which include current or near-term alternative energy and/or greentech products. And, while 2009 will continue to be a tough year for this group of companies, many of these small-cap auto industry survivors may well be positioned for substantial valuation gains once the economy stabilizes and begins to turn around.


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