Photo by lee attwood on UnsplashWith positive noise around a possible resolution of the automobile workers (UAW) strike, it isn’t a bad time to start looking at auto related names. I’m not as excited about the automakers themselves, as they are going to have higher costs related to labor moving forward. But, auto suppliers who were beaten down both in anticipation of the UAW strike and as the actual strike played out, like American Axle Manufacturing (AXL), are worth a closer look here.The company produces driveline systems and related components, and should see improvement in the next few quarters as the hangover from the strikes comes to an end.  The consensus target for AXL stock is almost 50% higher than the current stock price which is just over $7. From a valuation perspective AXL is trading at just 9.6x projected earnings and 4x free cash flow. The company has a PE of just under 20, and trades at only one and a half times book value. American Axle is moving with the industry toward providing more products for EVs, and sees the addressable market for their electric products reaching $20-30 billion by the year 2030. Along those lines, the company has recently signed EV deals with Stellantis, AMG, and Jaguar among others. AXL’s highest rating in our POWR Ratings is, not surprisingly given the recent pull back, in the Value category. It outperforms over 95% of the stocks tracked in the POWR Ratings in that category. The stock is trading much closer to the low end of a range it has been in for almost 2 years, from just under $7 to around $12. With a combination of automakers coming back online, and continued expansion of the EV space, AXL could head higher into that range.More By This Author:Income Stock Of The Week: Xerox Holdings
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