CIE
📉 CIE Automotive’s stock has fallen more than 20% since June, reaching 52-week lows, and is 36% below its 2018 highs.
⚙️ Despite being a cyclical company in a challenging sector, CIE Automotive shows consistent revenue and profit growth, with no losses in any year.
🌍 The company has a globally diversified sales base, with a strong focus on emerging markets like India and Brazil.
💰 CIE Automotive is trading at a PER of 8, with an estimated annual shareholder return of 15%, including dividends.
@Invierteygana:
“CIE Automotive is a company that designs, manufactures, and sells components for the global automotive market. As it is a stock that we have already analyzed, and we have analyzed transactions in the sector, we are going to see the most relevant. Currently, the company has accumulated a drop since June of more than 20%, being at 52-week lows, and is 36% below the highs of 2018, when the market got too excited about the stock. Despite being a cyclical company in a bad sector, its revenues and profits are growing, and we do not see losses in any year. In 2024, car sales worldwide decreased. Despite this, CIE’s profits grew by 1.7%. If we do not take into account an extraordinary profit in 2023, they grow by 5%, which is a very good result, especially if we look at other companies in the sector. Gestamp has reduced its revenues and profits this year. The 2024 results of the Volkswagen Group are also expected to be in this line. We have analyzed both companies two or three months ago. I leave you their analysis in the first comment. But Gestamp’s stock has risen 1% in 2025, and Volkswagen’s 24%. However, CIE’s stock is doing the opposite, despite the evolution of the results, that the company generates a free cash flow similar to the profits, and that it is one of the highest quality companies in the sector. Its net margin is higher than that of the competitors, and it has a very good ROIC for being an industrial company. In addition, this year it has continued to reduce net debt. So you may wonder why the stock is falling. Well, we can think that it is because sales in the fourth quarter fell, although the profit was maintained, but the main reason is the following: CIE has very diversified its sales worldwide: 25% in Europe, 7% in China, 16% in India, and 10% in Brazil. They are very focused on Brazil and especially on India, as they consider that they are markets where the automotive industry is going to grow. The remaining 30% is from North America, where they have 17 plants, 12 are in Mexico and five in the United States, and CIE has announced a new plant in northern Mexico. CIE has plants in northern Mexico to export to the United States, taking advantage of much lower costs in Mexico. So Trump’s announcements of tariffs on Mexico and Canada have not sat well with the stock. Despite the postponement of these tariffs, the reality is that the United States produces about 11 million vehicles a year, but sales are 17 million. So they import about 6 million vehicles, and the United States does not currently have the production capacity or the labor to manufacture all the cars it consumes. There are also not enough component factories. So manufacturers will have to import components. These tariffs would increase costs for US manufacturers. So I am not clear that they are going to be applied, and if they are applied, I also do not think they will last long. And on the other hand, Mexico is only a part of the company’s total sales. The company is trading at PER 8. Taking into account the growth that the company may have, especially through acquisitions of companies in Brazil, India, or Mexico, we expect it to be able to achieve 3.45 per share of profit in 2029. If we value with a PER 11, we arrive at a real value for 2029 of 38. This gives us a revaluation potential for 2029 of 69%, which is 11% per year. Taking into account the dividend it pays, we arrive at an estimated annual return for the shareholder of 15%.”
@Invierteygana shows the exact part of the YouTube video where CIE Automotive is discussed below.
View the video on YouTube.
Read more articles analyzing CIE Automotive (CIE) at the provided link. CIE stock.
