Thesis:Cooper-Standard(NYSE:CPS) is an auto parts supplier focused on sealing systems, fuel/brake delivery, and fluid transfer systems. The company was severely impacted by the downturn in new car volumes from 2018 to 2022 due to chip shortages, with revenues declining from $3.8 billion in 2017 to $2.3 billion in 2021. However, revenue has begun to rebound, reaching $2.8 billion in sales for 2023. In my view, CPS is just at the starting line; as car volumes revert to normalized levels, operating leverage will be significant, as detailed in the valuation section.
Thesis is based upon:
- Pent-up demand and an aging vehicle fleet: Combined...
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