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Payne's Picks

American Axle a Good Fit for Your 401(k)?

By Payne's PicksFOXBusiness

Can American Axle shares drive your portfolio higher?

FBN’s Charles Payne, NewOak Capital President James Frischling, Heritage Capital President Paul Schatz and Penn Financial Group founder Matt McCall on the outlook for American Axle & Manufacturing.

Let’s talk about American Axle (NYSE:AXL).

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I've been talking about this for two, three years … but I still like it. The chart looks absolutely phenomenal. They don't use their American part anymore, because it has really become a global play.

Let me give you the negatives first. Execution has been sloppy -- in the last three quarters they missed the Street two times -- and there's been a little bit of margin pressure.

But this is what I love. They are outpacing the industry, that means they are taking market share. In fact, over the next five years, they are going to take a whole lot of market share. I think some of the costs they are spending on now will pay off very well down the road. Their sales have been pretty solid -- 13%. Again, they have to bring the SGA costs down.

I love the fact that their backlog is getting up there really nicely. Take a look at the chart, I think it can get to $29, $30. A breakout takes it another 20% higher. It's not a trading vehicle, but I love the way it acts and I think it will be a good fit for most 401(k)s.DISCLOSURES

What do you think?

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