With shares of Delphi Automotive (NYSE:DLPH) trading at around $36.14, is DLPH an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Delphi Automotive is gorgeous on the surface. The stock has outperformed the S&P 500 by a wide margin since its IPO, cash flow is excellent, revenue is growing at a rapid pace, earnings have been impressive, and analysts are predicting strong growth going forward. It will also replace Titanium Metals (NYSE:TIE) on the S&P 500 beginning today. However, just like a gorgeous woman (or man,) it’s always a good idea to make sure you know all the details before making any kind of investment.
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The last quarter saw EPS come in well ahead of consensus, but guidance is always the key, and Delphi Automotive guided lower. This was mostly due to weakness in Europe. In addition to that, billionaires John Paulson and Paul Singer have cut their positions in the company. A $250 million investment on restructuring won’t help the short term, either.
Let’s take a look at some important numbers before forming a conclusion on Delphi Automotive.