Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1][2] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks can lose momentum when their valuations exceed future growth potential [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, which can be identified using the Zacks Momentum Style Score [3] Group 2: Strattec Security (STRT) Analysis - Strattec Security (STRT) has shown a four-week price change of 9.1%, indicating growing investor interest [4] - Over the past 12 weeks, STRT's stock has gained 85.8%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - STRT has a beta of 1.39, suggesting it moves 39% more than the market in either direction, indicating fast-paced momentum [5] - STRT has a Momentum Score of B, suggesting it is an opportune time to invest in the stock [6] - The stock has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors [7] - STRT is trading at a Price-to-Sales ratio of 0.49, indicating it is reasonably valued at 49 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides STRT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Company Overview - Strattec Security (STRT) currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [3] Price Performance - STRT shares have increased by 14.68% over the past week, outperforming the Zacks Automotive - Original Equipment industry, which rose by 3.83% during the same period [5] - Over the last month, STRT's price change is 11.4%, compared to the industry's 5.17% [5] - In the last quarter, STRT shares have surged by 84.76%, and over the past year, they have gained 176.83%, significantly outperforming the S&P 500, which increased by 25.34% and 13.06% respectively [6] Trading Volume - STRT's average 20-day trading volume is 110,963 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, one earnings estimate for STRT has moved higher, while none have moved lower, resulting in an increase in the consensus estimate from $3.67 to $4.40 [9] - For the next fiscal year, one estimate has also moved upwards with no downward revisions [9] Conclusion - Given the strong price performance, positive earnings outlook, and favorable momentum indicators, STRT is positioned as a solid momentum pick for investors [11]

Core Viewpoint - Garrett Motion (GTX) has shown strong year-to-date performance compared to its sector, indicating a positive outlook for the stock [1][4]. Company Performance - Garrett Motion has returned approximately 21.7% since the beginning of the calendar year, significantly outperforming the Auto-Tires-Trucks sector, which has returned an average of -14% [4]. - The Zacks Consensus Estimate for Garrett Motion's full-year earnings has increased by 4% over the past quarter, reflecting improved analyst sentiment [4]. - Garrett Motion currently holds a Zacks Rank of 2 (Buy), suggesting it is positioned to outperform the broader market in the near term [3]. Industry Context - Garrett Motion is part of the Automotive - Original Equipment industry, which consists of 50 companies and currently ranks 90 in the Zacks Industry Rank [6]. - Stocks within the Automotive - Original Equipment industry have gained about 8.4% year-to-date, indicating that Garrett Motion is performing better than its industry peers [6]. - Strattec Security (STRT), another stock in the Auto-Tires-Trucks sector, has returned 63.2% since the start of the year and has a Zacks Rank of 1 (Strong Buy) [5].

Core Insights - Strattec Security (STRT) benefits from over 90% of its U.S. sales qualifying for tariff-free or reduced-tariff treatment, providing a cost advantage and stability against potential tariff increases [1][7] - Only 6% of STRT's total sales are expected to be impacted by the latest tariffs, indicating a robust business model less vulnerable to financial damage from tariffs [2][7] - STRT has implemented measures to mitigate tariff-related costs, achieving a reduction of approximately 30% through changes in shipping, sourcing, and pricing strategies [3][7] Company Comparison - American Axle & Manufacturing Holdings, Inc. (AXL) is in a decent position regarding tariffs, with about 90% of its products adhering to USMCA trade rules, but it is not as well-prepared as STRT [4] - BorgWarner (BWA) anticipates that tariffs will negatively affect its profits this year and plans to pass these costs onto customers rather than finding ways to mitigate them [5] Financial Performance - STRT's stock has increased by 145.1% over the past year, contrasting with a 0.6% decline in the broader industry composite [6] - The company trades at a trailing 12-month price-to-earnings (P/E) ratio of 11.18x, significantly below the industry average of 27.09x [9]

Core Insights - Strattec Security (STRT) and Dorman Products, Inc. (DORM) are key suppliers in the automotive ecosystem, with revenues tied to vehicle production and aftermarket demand [1] Group 1: Performance Comparison - Over the past year, STRT has risen 145.1%, outperforming DORM's 37.7% growth, but deeper analysis of business fundamentals is necessary for a solid investment case [2][7] - STRT is trading at a 5.15x trailing 12-month EV/EBITDA, which is at a discount compared to DORM's 10.43x [11] Group 2: Tariff and Supply Chain Exposure - More than 90% of STRT's U.S. sales qualify for tariff-free or reduced-tariff rules, providing a cost advantage and stability [5][6] - DORM sources approximately 30% to 40% of its products from China, exposing it to geopolitical and trade risks [8] Group 3: Financial Health - STRT has a strong balance sheet with a debt-to-capitalization ratio of 5.25%, significantly lower than the industry average of 27.8%, allowing for greater financial flexibility [9] - DORM's free cash flow is healthy but is largely used for debt repayment and returning capital to shareholders, which may limit near-term flexibility [10] Group 4: Investment Outlook - STRT is working on reducing its China exposure, making it a more attractive investment option compared to DORM [15]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lead to limited upside or downside risks [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Strattec Security (STRT) Analysis - Strattec Security (STRT) has shown a price increase of 8.8% over the past four weeks, indicating growing investor interest [4] - STRT has gained 46.9% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [5] - The stock has a beta of 1.39, suggesting it moves 39% more than the market in either direction, indicating fast-paced momentum [5] - STRT holds a Momentum Score of B, suggesting it is an opportune time to invest in the stock [6] - The stock has a Zacks Rank 1 (Strong Buy) due to upward trends in earnings estimate revisions, which typically attract more investors [7] - STRT is trading at a Price-to-Sales ratio of 0.43, indicating it is relatively undervalued, as investors pay only 43 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides STRT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Insights - Strattec Security (STRT) has demonstrated resilience as a micro-cap player with a robust financial position, reporting a cash position of $62.1 million and approximately $47 million available under its revolving credit facility, totaling over $100 million in liquidity [1][6] - STRT's debt-to-capitalization ratio stands at 5.25%, significantly lower than the industry average of 27.79%, allowing for opportunities to invest in organic growth and new product development [2][4] - Despite ongoing uncertainty in the automotive sector, STRT is well-positioned for growth, with upward earnings estimate revisions for fiscal 2025 and 2026 [3][8] Financial Performance - STRT shares have increased by 139% over the past year, contrasting with a 7.6% decline in the composite stocks of the industry [5][6] - The company trades at a trailing 12-month price-to-earnings (P/E) ratio of 10.76x, which is below the industry average of 24.55x, indicating potential undervaluation [7][6] Earnings Estimates - The Zacks Consensus Estimate for STRT's fiscal 2025 earnings has seen upward revisions over the past 60 days, reflecting positive market sentiment [8][11]

Core Insights - Strattec Security Corporation (STRT) is currently trading at a trailing 12-month EV/EBITDA of 5.02x, significantly below the industry average of 18.34x, indicating it is undervalued [1][8] Financial Performance - STRT has improved its profit margins, with gross margin increasing by 560 basis points year over year to nearly 16% due to strategic price increases and operational enhancements [4][8] - The adjusted EBITDA margin rose from 4.4% to almost 9% year over year, reflecting the company's growing profitability in its core automotive security business [5] - STRT's total debt to capitalization stands at 5.25%, much lower than the industry average of 27.8%, providing financial flexibility for strategic investments [14] Strategic Initiatives - The company is focusing on disciplined capital allocation, particularly in light of uncertainties such as the U.S.-China tariff war, opting for investments that create long-term shareholder value [7] - For fiscal 2025, STRT plans to invest $7.5 million in capital expenditures aimed at IT upgrades, productivity enhancements, and product development, which will improve operational efficiency and competitiveness [9][10] Market Position and Outlook - STRT's stock has seen a year-to-date increase of 45.1%, outperforming the industry's composite stocks, which only improved by 0.3% [15] - The company's restructuring initiatives and strong balance sheet position it favorably for future growth, making it an attractive investment opportunity [19]

Core Insights - Strattec Security Corporation (STRT) has significantly improved its profit margins, with gross margin increasing by 560 basis points year over year to nearly 16% [1][7] - The adjusted EBITDA margin has nearly doubled from 4.4% to almost 9% year over year, indicating enhanced profitability in its core automotive security business [2][7] - STRT is investing in talent and operational restructuring in Mexico and Milwaukee, expecting full benefits from these changes to materialize in the first quarter of fiscal 2026 [3][7] Financial Performance - STRT's shares have surged by 147.3% over the past year, contrasting with a 4.5% decline in the broader industry [6] - The company trades at a trailing 12-month price-to-earnings (P/E) ratio of 10.86x, which is below the industry average of 25.22x [9] Future Projections - AXL projects adjusted EBITDA between $665 million and $745 million for full-year 2025, focusing on long-term profitable growth [4] - BWA aims for an operating margin of 9.6% to 10.2% and free cash flow of $650 million to $750 million for 2025, indicating confidence in sustained profitability [5] - The Zacks Consensus Estimate for STRT's fiscal 2025 earnings remains unchanged at 4.40 [10][11]

Summary of Strattec Security (STRT) FY Conference Call - June 11, 2025 Company Overview - Strattec Security is primarily an automotive supplier with a product portfolio that is powertrain agnostic, serving both internal combustion engine and electric vehicles [2][3] Key Segments - The company operates in three segments: 1. **Security and Authorization**: Originating from the lock and key business 2. **Power Access Products**: Includes power liftgates, tailgates, and sliding power doors 3. **User Interface Control**: Focused on steering wheel switches and components [3][4] Growth Opportunities - Significant growth potential in digital key technology and power access products due to increasing vehicle features [4] - The user interface control segment is crowded, leading to a strategic focus on digital key and power access for long-term growth [5] Customer Base - Major customers include Ford, GM, and Stellantis, which account for 75% of sales [24] - The company aims to diversify its customer base over the long term [24] Operational Focus - The company is undergoing a transformation focusing on team building, business processes, and margin improvement [8] - Recent operational improvements include restructuring in Milwaukee and Mexico, and a focus on pricing strategies that generated $8 million in annual pricing [15][23] Financial Performance - Generated $20 million in cash flow in Q3, with a revenue increase of $3.3 million driven by price increases and favorable product mix [20][22] - EBITDA for Q3 was $12.9 million, representing an 8.9% margin, which is double the previous year's performance [22] - Gross profit margin for Q3 was 16%, with a year-to-date margin of 14.3% [27] Challenges and Risks - The company faces challenges from tariffs impacting North American automotive production, which could affect revenue if production levels soften [12][13] - The majority of products are USMCA qualified, mitigating some tariff impacts [12] Future Outlook - Long-term goals include increasing gross margin from 16% to 20% through pricing, volume growth, and operational improvements [41] - The company is focused on stabilizing its foundation before considering acquisitions for growth [46] Capital and Investment Strategy - Capital expenditures are expected to be around 2% of sales, primarily for customer program launches [33] - The company maintains a strong balance sheet with $62.1 million in cash and $47 million available under revolving credit facilities [31] Additional Insights - The Milwaukee facility is listed for sale at $17 million, as it is deemed too large and in need of modernization [37][39] - The company is exploring opportunities in autonomous vehicles, as its products are applicable across various vehicle types [45] Conclusion - Strattec Security is in the early stages of a transformation aimed at improving operational efficiency and expanding its market presence, with a strong focus on automotive supply chain dynamics and customer diversification [34][36]