× InvestingStocksToolsClubsVideosPrivacy PolicyTerms And Conditions
Subscribe To Our Newsletter

Magna Stock: A Buy in December 2022


Investor wonders if it's safe to buy stocks now

Shares of Magna International (TSX:MG) have been on a roller-coaster ride in the last year. After losing nearly 36% of its value in the first three quarters of 2022, MG stock staged a more than 26% recovery in October and November combined, helping it regain investors’ confidence to some extent. However, it turned negative again in December, as it now trades with about 6% month-to-date losses.

But could the recent dip in Magna stock be seen as a buying opportunity — especially if you want to hold this Canadian stock for the next decade. Before we analyze its fundamental outlook to determine whether MG stock is worth buying now to hold in 2023 and beyond, let’s take a closer look at some key factors that moved its share prices in 2022.

Magna stock: Key factors in 2022

If you don’t know it already, Magna International is one of the biggest auto suppliers in the world, headquartered in Aurora. The company has a presence in 28 countries with more than 340 manufacturing facilities and some of the biggest names in the auto industry being its customers. Considering new trends in the automotive space with growing demand for autonomous and electric vehicles, Magna International has increased its focus on mobility technology in recent years.

MG stock currently has a market cap of $22.2 billion, as it trades at $77.92 per share with about 24% year-to-date losses. At this market price, it also offers a decent 3.1% dividend yield.

The year 2022 started with pessimism for investors, as the Canadian stock market witnessed a massive selloff, especially in growth stocks, due mainly to factors like high inflation, rising interest rates, and growing geopolitical tensions. While these negative factors initially affected high-growth tech stocks, shares of the auto supplier Magna International also slumped as global supply chain issues continued to dim its fundamental growth outlook.

This is one of the biggest reasons why Magna had to cut its full-year 2022 outlook on multiple occasions, hurting investors’ sentiments and driving a selloff in MG stock.

Is Magna stock worth buying now?

After a disappointing 2022, investors were hoping for the ongoing supply chain disruptions to ease significantly in 2023. But the possibility of a looming recession amid rapidly rising interest rates is still keeping investors on their toes. Given that, I wouldn’t expect a miraculous recovery in Magna stock in the short term.

But even in a challenging macroeconomic environment, the Canadian auto parts company continued to focus on taking long-term growth-oriented strategic initiatives in 2022. To give a quick example, Magna recently announced the expansion of its Romania-based ADAS (advanced driver-assistance systems) engineering capabilities to benefit from expected significant ADAS demand growth in the coming years.

Bottom line

Although macroeconomic uncertainties might keep Magna stock volatile in the coming months, you can expect its financial growth trends to improve significantly in the coming years based on its continued efforts in the right direction. Considering that, a double-digit decline in its share prices in 2022 could be an opportunity for long-term investors to buy it at a bargain.

The post Is Magna Stock a Buy in December 2022? appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Magna International?

Before you consider Magna International, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in December 2022 … and Magna International wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 16 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks
* Returns as of 12/13/22

More reading

  • Investing in the Stock Market Could Turn Your $1,000 Into $100,000: Here’s How
  • Magna Stock Rose 9% in November: Is it a Buy Today?
  • 2 Dividend Stocks That Could Lead a 2023 Rally
  • 3 Stocks You Can Keep Forever
  • Retirement Investors: 3 TSX Stocks That Could Rally With the Economy 

The Motley Fool recommends Magna International. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.



By: Jitendra Parashar
Title: Is Magna Stock a Buy in December 2022?
Sourced From: www.fool.ca/2022/12/20/is-magna-stock-a-buy-in-december-2022/
Published Date: Tue, 20 Dec 2022 19:30:00 +0000

Read More