I established a full portfolio position in Superior Industries International (SUP/NYSE) this morning. (I meant to follow my normal practice of alerting readers an order had been placed with my broker, but the day was hectic and things got away from me.) I bought my shares at $17.41 and they ended the day at $17.70.
If you read the recent Forbes article on Walter Schloss that I linked to, you're aware of Superior Industries. The company makes wheels for original equipment manufacturers. The market capitalization is roughly $462 million with less than 27 million shares outstanding. At current prices, the stock goes for less than .9 times book, one-half annual sales, and yields more than 3.5%. The company has no debt. The current ratio is almost 3-to-1.
In addition to Schloss being an investor, WSJ.com lists Marty Whitman's firm as being a big holder of the stock, increasing its position in the last quarter.
On the worrying side, Superior Industries' last 10-Q reports that more than 80% of the company's business is with General Motors, Ford and Chrysler. That fact, and an anticipated economic downturn of greater or lesser degree probably accounts for the lackluster performance of the stock over the past year or so.
Summing up, I believe Superior Industries International is worth more than the current stock price. And I believe the rock-solid balance sheet can withstand troubled times over the short-to-intermediate term. That's it.
But understand, if the Big Three Detroit automakers tank and Superior cannot replace their business, things could get even uglier. I'm not expecting that, yet please do you own due diligence before taking the wheel on this one.