It's certainly an interesting situation. The company's Russian operations idling are unlikely to have a material impact on the company. As mentioned, the company operates 6 plants out of 104+, and those plants employ about 2500 of its 158,000 total employees.
In my opinion, if you bought Magna right now and held it for the long term you would be absolutely fine. However, is that the BEST strategy? The main issue here and the reasoning we've moved to Neutral status on the Bull List until some things become clearer is simply the uncertainty in terms of how this war will impact other European countries where Magna does have lots of operations. Then we have to consider how rising material prices/supply chains/inflation will hit the bottom line. This company has been very good at reporting its updated guidance in light of current issues. But considering it reported earnings not even a month ago, it's likely we don't hear about current headwinds for several months.
The entire sector is under a large amount of pressure, especially with the release of Martinrea's results. If we strip out the pandemic, which was very unusual circumstances, this is the first time the Martinrea posted a loss on a quarter since 2016.
Now, that's not to say that Magna will be impacted the same way. It may be able to source cheaper materials and may have better access to supply lines due to its Blue-chip nature. We were willing to leave the company on the Bull List in the midst of supply chain issues. In fact, a main part of our thesis was that Magna was being discounted because of these issues that will be short-term in nature. However, now that the war has broken out, which is an event that was impossible to predict in advance, supply chains may drag on longer, material costs may rise even further and now we have some of its operations being halted. This is why we are in a wait and see mode with Magna.