Inside Wall Street
GENTEX: ITS SAFETY MIRROR MOVES IT INTO THE FAST LANE
Have you ever been blinded by the glare of bright lights from behind when driving at night? If you have, you'll like what Gentex has developed: A rearview mirror for cars and trucks that automatically darkens to reduce the glare from headlights. Some smart-money pros have been quick to see the need for Gentex' patented product and have been scooping up its shares.
Sure, the stock has climbed from 9 a share in late December to 21 3/4 on June 22. But these pros believe Gentex' stock is far from hitting the ceiling, and they say that another big upswing is in the works.
"Gentex is the industry's big sleeper, and with its 40% annual growth rate, the stock should double over the next 18 months," says one New York money manager. Jean-Claude Gruet, automotive analyst at UBS Securities, a subsidiary of Union Bank of Switzerland, is also high on Gentex. "It's a pure play in what we consider one of the most promising growth segments of the auto industry for the next decade."
Marketed under the name Night Vision Safety Mirror, Gentex' product has caught the eye of Detroit because it enhances driver safety. The mirrors are already offered as standard or optional equipment on 57 upscale domestic and foreign cars, including Mercedes-Benz, Rolls-Royce, BMW, Cadillac, Lincoln, and Infinity.
`BRIGHT PROSPECTS.' On June 22, Chrysler signed a contract to buy Gentex' mirrors for its 1994 Dodge Dakota midsize pickup trucks and the new full-size Ram pickup trucks. The mirrors will also be offered as standard or optional equipment on several other Chrysler models such as the 1994 LH passenger cars and several Jeep models, including the Grand Cherokee.
"The latest Chrysler contract validates the bright prospects for Gentex," says Gruet. The next major order, he adds, may come from Toyota Motor for its Lexus LS 400--the rival to Nissan's Infinity Q45, which uses the product.
The mirror's penetration in the auto market is still under 10%, notes Gruet. He expects Gentex to soon go after the minivan and midsize-car markets. Gruet projects shipments jumping from 1.2 million this year to 1.55 million units in 1994 and 2 million in 1995. Gruet sees the debt-free company earning 55 in 1993, 75 in 1994, and $1 in 1995. It earned 32 in 1992.
Last April, Gentex won a suit against Donnelly Corp. barring the latter from infringing on Gentex' patent on the rearview mirrors.GENE G. MARCIAL