Strattec Security: Auto Industry Prospects Will Likely Dominate (Downgrade)

Long Player Investing Group Leader Follow Summary Strattec Security Corporation faces significant macro headwinds from persistent high oil prices and a weakening auto industry outlook. Auto industry forecasts are deteriorating, and management’s cost-cutting efforts may only offset declines, not drive growth. Management’s automation and new product initiatives are unlikely to overcome industry-wide demand challenges. Despite a strong balance sheet with over $100 million in cash, STRT’s fortunes remain tightly linked to the coming struggles of the auto sector. STRT revenue was essentially flat year-over-year in the latest quarter. This idea was discussed in more depth with members of my private investing community, Oil & Gas Value Research. Learn More » 123ducu/iStock via Getty Images Strattec Security Corporation ( STRT ) has long been about auto locks and access (very roughly). However, the automotive industry has headwinds in the form of higher oil prices that are threatening to go higher still. This may well dominate This article was written by Long Player 25.92K Followers Follow Long Player believes oil and gas is a boom-bust, cyclical industry. It takes patience, and it certainly helps to have experience. He has been focusing on this industry for years. He is a retired CPA, and holds an MBA and MA. He leads the investing group Oil & Gas Value Research. He looks for under-followed oil companies and out-of-favor midstream companies that offer compelling opportunities. The group includes an active chat room in which Oil & Gas investors discuss recent information and share ideas. Learn more. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Disclaimer: I am not an investment advisor, and this is not a recommendation to purchase or sell a stock. Readers are encouraged to read all company SEC filings, press releases, and conduct an investigation to determine for themselves if a company fits their investment risk profile. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.