John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Shiloh Industries Is An Undervalued Auto Parts Supplier

The current valuation for Shiloh Industries (NASDAQ:SHLO) does not reflect its strong financial performance or dominant position in the fast growing niche market of supplying auto parts that increase fuel efficiency.

Company overview

SHLO provides lightweighting, noise, and vibration solutions to the auto, commercial vehicle and industrial markets. Products include precision and engineered welded blanks, complex stampings, modular assemblies, aluminum die casting and machined components as well as the patented ShilohCore acoustic laminate metal solution.

Investment thesis

There is a severe disconnect between the mid single-digit EBITDA valuation (low on an absolute and relative basis) and the multiple significant value catalysts.

Value catalyst #1 - favorable industry conditions. The auto market rebounded strongly from the lows during...

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