The Motley Fool

Why Martinrea Shares Rallied Today

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of auto parts manufacturer Martinrea International (TSX: MRE) soared 13% today after announcing that Nick Orlando will be stepping down as Martinrea’s President and Chief Executive Officer.

So what: Martinrea shares have underperformed the market over the past few years, so investors are naturally interpreting today’s news as a positive and highly significant catalyst going forward. So while the company implied that ongoing health issues — not outside investor pressure — were behind Orlando’s decision, Bay Street is hoping that a change will be a positive factor.

Now what: Orlando will help Martinrea’s board search for a new President and CEO, assist with the transition, and remain as a consultant to the company after that. “I am very grateful for the support that both we as a team and I personally have received over the years, from our people, our customers and our stakeholders,” said Orlando. “I have always given my best for this company and will continue to support it going forward. My immediate focus is on improving our operations and processes in problem plants.”

Of course, when you consider Martinrea’s still-hefty debt load and worrisome operating issues (it lost $54 million in Q4), shareholders might want to use today’s double-digit pop as an attractive exit opportunity.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share. Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune. Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.