How Well is Strattec's Business Model Insulated From Tariff Pressures?

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]