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Letter to the Editor
This article originally appeared in the November 2001 Issue of INSIGHT
Small Steps and Slight Adjustments
Well, as this is written, 17 of the 24 stocks that we cover are up from the close of Market last month on September 17, the first day of trading after the September 11 tragedy.
It would appear that collision industry-related stocks are not only back up on their feet, they’re taking some small steps upward.
Major gains last month in the refinish area include Akzo, DuPont, PPG, and Sherwin-Williams, all showing a ten percent or more increase in the past month.
Other key industry players with significant share value increases include 3M, up over $10; Copart up $10, almost 50 percent for the month; and Keystone up ten percent for the month.
Although I have no understanding of why, Driversshield (First Priority Group), a company that I have been, and continue to be, completely negative on for reasons covered in past columns, saw its stock surge from $0.87 to $1.30.
While Copart surged over $10, its competition, Insurance Auto Auctions, dropped over 30 percent to a new low for the year.
Insurance stocks all rose, based on increased revenue, and should show a good year, based on premiums increasing, coupled with flat to slightly-up claims frequency and average claims costs.
Shareholders of Frontier Adjusters of America, Inc. approved a proposal to privatize the company, with a cash-out merger. All outstanding shares in the hands of the public will be exchanged for $1.58 per share.
Allstate's decision several years ago to exit large commercial and reinsurance areas and to concentrate on personal lines cushioned the impact of the September terrorist strikes. Compared with the sizable losses sustained by many other carriers Allstate's estimated $32 million in claims (while certainly a hefty sum) is at the low end of insurer figures.
Since the company's decision to concentrate on mainly U.S. markets, Allstate recently finalized the sale of its subsidiaries in Germany and Italy for a $34 million after-tax loss.
Progressive's third-quarter profits more than tripled from a year earlier, due to a jump in sales of its auto insurance policies and to the company's absence from the life and reinsurance markets.
Last month I commented on Parts.com, its one for ten reverse split, and the fact that insiders were flocking to leave a sinking ship. Well, the stock continues to slip with a new low for the year of 32 cents as this is written, down from a 2001 high of $4.10, and a 52-week high of $22.50.
As we approach the last month of 2001, investors are cautious, but laudably matter-of-fact. Some market analysts are actually saying the word "Recession" now, but very quietly, somewhat calmly, and preceded by that lovely word "slight."
As American families prepare to feast on turkey and pumpkin pie, we all have much for which to be thankful.
Have a happy and blessed Thanksgiving!
-Charles Baker-
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