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North America sales of cars and commercial vehicles are showing solid growth so far in 2012. One stock that has is undervalued and is well positioned to take advantage of the recovery in these markets is Dana Holdings (DAN).

Dana Holding Corporation

Business Description from Yahoo Finance (see here):

Dana Holding Corporation engages in the design, manufacture, and supply of driveline products, technologies, and service parts for vehicle manufacturers worldwide. It provides light axles, driveshafts, structural products, sealing products, thermal products, and related service parts for light trucks, sport utility vehicles, crossover utility vehicles, vans, and passenger cars.

7 reasons to pick up DAN at $16 a share:

  1. Dana Holdings is showing accelerating earnings growth. The company made $1.66 in FY2011, it is expected to earn $1.91 in FY2012 and analysts project $2.28 in earnings for FY2013.
  2. The company has significantly beat earnings estimates for four straight quarters. It also just instituted a dividend of 20 cents annually.
  3. The stock is selling some 30% below the consensus price target of $21 of the 11 analysts that cover the company.
  4. Sales growth is very solid. Analysts project high single digit revenue growth for both FY2012 and FY2013.
  5. It has a dirt low five year projected PEG (.27) and sells at under 7 times operating cash flow.
  6. The stock is cheap at just over 7 times forward earnings, 30% of annual revenue and it also has a solid balance sheet with net cash on the books. Its credit rating was also recently upgraded byS&P.
  7. The company has introduced numerous innovative products that increase fuel efficiency and more importantly are increasing the company's margins.
Source: Dana Holdings: Improving Vehicle Market Will Boost This Undervalued Manufacturer