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This company is a leading global supplier of seating and electrical distribution systems, supplying every major vehicle manufacturer in the world, notes David Fried, editor of The Buyback Letter.

Lear Corp. (LEA) operates in two segments—seating and electronic systems. The seating segment includes seat systems and related components such as seat frames, recline mechanisms, seat tracks, seat trim covers, headrests, and seat foam.

The electronic systems segment includes electrical distribution systems for traditional powertrain vehicles, as well as for hybrid and electric vehicles.

Lear made 17 acquisitions in the 1990s to transform itself into a full-blown interiors company, and then divested this interiors business in the mid-2000s.

The seating business accounts for more than 75% of revenues for each of the past six years. Overall sales come globally—39% from North America (biggest customers: General Motors, Ford, and BMW), 35% from Europe, 17% from Asia, and 9% from the rest of the world.

After a loss in 2009—and filing for bankruptcy protection—the company has been growing earnings well. Annual EPS grew from $4.42 in 2010 to $5.49 in 2012, and analysts expect a three- to five-year growth rate of around 23%. Lear has beaten the consensus for six consecutive quarters.

For the latest quarter, Lear reported EPS of $1.30, beating expectations by $0.20. Net sales for the period were up 8% to $3.9 billion, and core operating earnings were up 3%.

Analysts praise the company's strengths in revenue growth, consider that it has a largely solid financial position with reasonable debt levels, notable return on equity, attractive valuation levels, and good cash flow from operations.

Lear has a market cap of $5.66 billion, it yields 1.11%, and the stock has rallied about 60% in the past year, reaching a 52-week high just days ago. Management has reduced shares outstanding by 7.2% in the last 12 months.

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Tickers Mentioned: LEA

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