Magna International (MGA) Slid Due to Heightened Tariffs

Hotchkis & Wiley, an investment management company, released its “Hotchkis & Wiley Large Cap Fundamental Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 500 Index fell by 4.3% during the first quarter of 2025. Until March, the market had been performing well, but investors began to struggle with the rapid policymaking of the Administration, especially concerning tariffs. In a significant shift from recent trends, the downturn was primarily driven by large-cap growth stocks. The Hotchkis & Wiley Large Cap Fundamental Value Fund (I Shares) returned 2.52% in the first quarter, outperforming the Russell 1000 Value Index’s 2.14% return. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, Hotchkis & Wiley Large Cap Fundamental Value Fund highlighted stocks such as Magna International Inc. (NYSE:MGA). Magna International Inc. (NYSE:MGA) is a leading auto supplier. The one-month return of Magna International Inc. (NYSE:MGA) was 0.32%, and its shares lost 13.51% of their value over the last 52 weeks.  On June 9, 2025, Magna International Inc. (NYSE:MGA) stock closed at $37.25 per share, with a market capitalization of $10.495 billion.

Hotchkis & Wiley Large Cap Fundamental Value Fund stated the following regarding Magna International Inc. (NYSE:MGA) in its Q1 2025 investor letter:

“Magna International Inc. (NYSE:MGA) based in Ontario Canada, is the fifth largest global auto supplier. Shares fell over the period, along with other Canadian auto parts suppliers, due to the potential of heightened tariffs between Canada and the United States. The stock was further pressured after the company provided FY2025 guidance that was below consensus estimates. The weak guide was driven by lower light vehicle production estimates. We believe the stock is undervalued as it is a cyclical auto supplier that is facing near-term headwinds. Magna has the capability to supply close to two thirds of a vehicle’s content, including Auto2.0 technology.”

An assembly line of light trucks in a state-of-the-art manufacturing plant.

Magna International Inc. (NYSE:MGA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Magna International Inc. (NYSE:MGA) at the end of the first quarter, which was 16 in the previous quarter. Magna International Inc.’s (NYSE:MGA) first quarter consolidated sales declined 8% to $10.1 billion. While we acknowledge the potential of Magna International Inc. (NYSE:MGA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Magna International Inc. (NYSE:MGA) and shared the list of most undervalued Canadian stocks to buy according to Wall Street analysts. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.