Delphi Automotive (DLPH) Still Offering Growth in 2013

Page 1 of 2

Delphi Automotive PLC (NYSE:DLPH) is a vehicle components manufacturer that provides electrical and thermal technology for autos. Although Delphi is already up over 75% year to date, we still see room for growth in 2013.

Delphi’s 3Q EPS results came in at $0.84 versus $0.72 for 3Q 2011. Strong future performance is expected to come from its recent acquisition of FCI Group’s motorized vehicles division (MVL). The auto company plans to spend $250 million in restructuring costs to integrate MVL, but the savings will be upwards of $80 million for 2013 alone. Billionaire John Paulson is one of Delphi’s biggest investors, owning over 25 million shares (check out John Paulson’s picks).

PAULSON & CO

The chief fundamental driver for the company will be a rise in auto sales. The current average age of vehicles on the road is pushing eleven years. Additionally, MVL’s pre-synergistic EBITDA contribution of $130 million, which is expected to add $0.22 to 2013 EPS, will help out in the short term.

From a valuation standpoint, Delphi is one of the cheapest stocks in the industry at only 8x forward earnings and 7x cash flow. It is hard to see why the auto parts company trades at a such a discount to its peers when it leads in so many areas – including return on equity (60%), 5-year expected EPS growth (18% CAGR) and EBITDA margin (14%). Placing the peer average forward P/E (11x) on Delphi’s 2013 EPS estimates suggests upside of 25% over the next 12 months.

Notable competitor Visteon Corporation (NYSE:VC) supplies climate control and lighting systems for use in autos. The company is on the high-end of the industry’s valuation spectrum at 80x earnings. We tend to agree with many hedge fund investors that Visteon could unlock shareholder value by spinning off its non-core assets and focusing on its climate control business. Following a 40% stake increase, Visteon now calls billionaire Steven Cohen as one of its top investors (check out Steven Cohen’s key picks).

Who’s the best of the rest?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!