Linamar Corporation shares represent a significant gain potential currently.
The company displays a low valuation level with a P/E ratio of 11.9x for 2015, which theoretically limits the downward potential. Moreover, it benefits from analysts' optimism, who regularly revise upward earnings estimates, and target on average a 16% appreciation potential.
Technically, the stock evolves in a bullish trend on the medium and long term. On the short term, the trend turned neutral due to a consolidation phase inside the CAD 65/72 trading range for several weeks. The proximity to the CAD 65.24 support now could revive the bullish trend in the short term.
Therefore, it would be opportune to open a long position on the stock to target the CAD 72 resistance. However, a stop loss should be placed under the CAD 65.25 support.
Linamar Corporation is a Canada-based advanced manufacturing company. The Company is engaged in providing manufacturing solutions and developing engineered products. Its segments include Industrial and Mobility. The Industrial segment consists of MacDon, Salford, Bourgault, and Skyjack. MacDon manufactures combined draper headers and self-propelled windrowers for the agricultural harvesting industry. Skyjack manufactures scissor, boom, and telehandler lifts for the aerial work platform industry. The Mobility segment is focused on propulsion systems, structural and chassis systems, energy storage and power generation for both the global electrified and traditionally powered vehicle markets and is subdivided into three regional groups and one global product group: North America, Europe, Asia Pacific, and the newly formed Structures Group. The regional mobility groups are vertically integrated operations combining expertise in light metal casting, forging, machining, and assembly.