Magna (MGA) unveiled its newest autonomous driving technology system, the MAX4 system this morning. Magna is a auto supplier that makes and assemblies various vehicle components globally. Like many others in the industry, the company seems to have put quite an emphasis on autonomous technology of late as evidenced by both its strategic investment in Innoviz, a creator of LiDAR autonomous technology and release of new autonomous technology today.
This LiDAR technology is the reason most autonomous vehicles have a large spinning device on the roof of the car, which provides autonomous vehicles with the ability to have 360-degree visibility and react to environments. It is an essential for autonomous vehicles.
Magna has set itself apart by doing away with the spinning device that must be put on top of the vehicle, allowing automakers to retain a nice aesthetic look for their lineup. The company has also achieved up to level 4 autonomy on a scale of 0-5. A level 4 indicates that there is a high level of driving automation, but the car cannot completely takeover driving unsupervised.
The system is operated in a comparable way to the popular cruise control setting available in most cars. It can be activated with one button and deactivated with the push of the brake or an emergency button. This ease of use may make adoption much easier.
Like many automotive companies, MA trades at a low P/E (~8.5). With much speculation of a cyclical downturn evidenced by faltering monthly auto sales coupled with a radical change to the landscape of the industry investors have chosen to allocate their capital to seemingly more promising spaces.
The automotive industry is seeing strength today, leading into monthly auto sales numbers tomorrow and following a bullish note on Fiat Chrysler (FCAU), at Goldman Sachs this morning. As for MGA, the stock has been trading in a range of $45-49 since the end of June and broke through its 50-day moving average in a bullish manner today.