Contrarian Auto Part Maker Play

There has been plenty in the news regarding General Motors, Ford, and the state of US automakers. Along with Citizen Kane, these guys have seen better days. Though had you purchased shares of GM or F at the bottom, you'd be sitting on a tidy little profit, see Captain Kirk. Over the weekend there was a report that Appaloosa Management is looking to INCREASE their current position into troubled autoparts manufacturer Delphi from 9.3% stake to 33%. OK, so these guys lost $3.7 Billion in 8 months (I guess their no Amaranth!) but they also pulled in $11.86 Billion in revenue for '06. Delphi provides auto parts mainly for General Motors, which seems to have turned the corner, and in the past has been highly correlated to their performance (R = .87). Keep in mind, these guys are on the pink sheets and still have relatively high default risk. The '09 6.5% bonds traded higher today on the news though, and potentially another way to play this name-remember equity holders are last in line to the assets.