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Payne's Picks

Can Gentherm Inc. Make You Money?

By Payne's PicksFOXBusiness

Can Gentherm shares heat up your portfolio?

FBN’s Charles Payne, Fairfax Global Markets CEO Paul Dietrich, A&G Capital CIO Hilary Kramer and Penn Financial Group founder Matt McCall on the outlook for Gentherm.

Let’s talk about Gentherm Incorporated (NASDAQ:THRM).

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It had a really good session Tuesday. They're in a few areas, as the name may imply. Power generation and industrial materials. In automotive, they do those seats -- the interior -- that thermal management, climate control. I don't know about you, but my wife loves the climate control stuff. It bothers me a little bit. The seats get too hot, too quick. It works too much.

Last quarter they did very, very well. Revenues were up 20%, gross margin expanded almost to 30% from 26.8%. They've got a great platform with the General Motors SUV platform -- Jeep Grand Cherokee -- you see its sales absolutely through the roof.

Now they're branching out. They're doing office furniture for Herman Miller. Peg Ratio is 0.81 -- a string of earnings beat (although last quarter, they only beat the Street by 14%. That was the lowest in a few quarters.) But still, today, it's on a cusp of breaking that 50-day exponential moving average. I think it moves to $40 -- gets you a trade on 10% -- I do like it longer term to $53.


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