Your Source for Up-To-Date News and Research on the Collision Repair Industry
click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email
SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor
Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide
Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...
Feedback
Letter to the Editor
This article originally appeared in the April 2001 Issue of INSIGHT
Hey...The News Ain't So Bad
There is, believe it or not, good news as it relates to investment in stocks related to the Collision Repair Industry. That good news is that the Supplier Index is up just a touch over five percent, while the Dow, Standard and Poors, and NASDAQ are all down for the year.
The Auto Parts and Equipment Index is up a whopping 23 percent on a YTD basis, which is, of course, a lot more than our INSIGHT Index of industry stocks picked by your publisher, up just under three percent.
It would certainly appear that those stocks now selling for a relatively modest PE ratio, e.g. below 15, will be the ones that will show a possible gain for 2001 while the tech stocks will probably continue to get hammered for at least the next quarter.
From a sales standpoint, our industry has not been hit. Insurers report that claims are still up over last year by six to eight percent, and severity, e.g. the average repair cost, is still over 2000 levels by approximately eleven percent.
Companies where the value of the stock has gone up YTD include AutoNation at a PE ratio of 9; FinishMaster at 14; Insurance Auto auctions at a 10 PE; and Snap-on at a PE of 11.
It is hard to believe that these stocks, all of which show a YTD value higher than in January, will not do well the rest of the year. The PEs are relatively low and, perhaps more importantly, they are not tied to the high tech stocks.
The saga of the potential de-listing of Driversshield.com, formerly First Priority Group, continues. Driversshield had a day or two over one dollar but needs ten consecutive days to avoid de-listing. According to a press release just put out by Driversshield an unaudited statement for the last quarter draws both a modest sales gain and slight net profit.
It continues to be a mystery to the writer that insurers truly will believe that the shop can pay Driversshield twelve percent of the repair bill and make a profit without raising the estimate or cutting the quality. When the first major consolidator signs up with Driversshield I will truly believe in the Tooth Fairy.
Insurance stocks are, of course, sensitive to interest rates, and if the Fed lowers rates this week as expected, these stocks will probably take a hit. Already, Allstate, Progressive, and Safeco are down slightly.
-Charles Baker-
Feedback
Have a comment about this article? Send Email to Charles Baker, INSIGHT's Publisher
©2001 Collision Repair Industry INSIGHT
All Rights Reserved
FEATURED
LINKS:
