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Letter to the Editor
This article originally appeared in the May 2002 Issue of INSIGHT
Slow and Steady
Well, as I predicted, the economy is apparently oh-so-slowly, steadily, recovering. This past month, our numbers calculating YTD percentage of change for our Collision Repair Supplier Index and our Insurer Index barely fluttered. I think, after the long period of expansive growth in the economy, the dot-com booms and busts, and the uncertainty in the marketplace since the shocking 9-11 events, slow and steady is the best way to go.
CCC has been doing very well, up almost 60 percent since January 1. The timing of this jump ahead after a lengthy period of relative inertia is somewhat surprising. It looks as though CCC’s plan to concentrate on the company’s core business interests is really a winner.
Speaking of winners, Keystone Automotive, subject of a special feature this month (See page 9.), is steadily growing, with a current share price of $18.70, up a nice even ten percent this year.
FinishMaster’s stock price has been just shy of a ten percent improvement for the last few months. This month’s $11.10 actually reflects fairly steady improvement since the $5 per share price at the beginning of 2001, after the company’s per share price sank over 35 percent during 2000.
Our refinish materials manufacturers all included mention of already-in-place measures to improve earnings in rather dismal Fourth Quarter financial reports. It looks as though these positive steps toward leaner, sleeker companies will continue to be rewarded with higher per share prices. Sherwin-Williams and DuPont are both up over ten percent YTD, with BASF and PPG just a hair behind them.
On the insurance side, Allstate and Progressive are both up over 16 percent YTD this month, which may be indicating some confidence on Wall Street that both companies have their focus steadfastly on the bottom line and will handle increasing severity costs and expenditures firmly.
In other insurer news, Unitrin has acquired the personal lines property and casualty businesses of Kemper Insurance. Kemper's Individual and Family Group business unit ("IFG") specializes in the sale of personal automobile and homeowners' insurance through independent agents.
Tokio Marine, the Japanese insurer, has been merged with Millea. Some sort of combining deal like this has been anticipated for some time in Japan. The new entity will continue to trade on the NASDAQ under the Millea symbol, MLEA.
In Canada, the Boyd Group, still North America’s only publicly traded collision repair facility operation, is showing some signs of upward movement, with its stock per share price up almost eight percent in April after a stagnant First Quarter on the Toronto Stock Exchange. The company’s end of year 2001 financials reported revenues up a very respectable 38 percent over 2000.
Here’s hoping we keep on course the rest of 2002 - Steady as she goes, Cap’n!
-Charles Baker-
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