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Letter to the Editor

This article originally appeared in the July 2003 Issue of INSIGHT

Like a Weather Forecast

Well, the heat has finally hit INSIGHT’s hometown, where Summer has taken a long time coming. In usual Cleveland fashion, though, the temperature has soared suddenly. The Stock Market can be as notoriously changeable as the weather here, but the last few months have seen stocks generally plodding along in a gradually warming trading climate. Nice and easy is a welcome change for me - and for my blood pressure.

Can we expect more of the same? My guess is that the atmosphere will remain temperate for the next few months. I base this weather report of mine primarily on the observation that the Dow, up just a hair over six percent from January, has been consistently improving overall, but just in tiny increments, during months when the U.S. has been in and out of a war situation. That seems pretty unflappable to me in a Market that I have been known to describe as a roller coaster ride, so sensitive stocks usually are to any changes in climate.

Of the stocks we track, eAutoClaims stock is selling at over double its price at the beginning of 2003, and some of the company’s financials are improving, according to its latest report. However, with a nine-month net loss as of April 30 of over $1 million, considerably better than the $2.7 million loss for the same period last year but still a big red number, eAutoClaims has a long way to go.

Both United Auto Group, up 66 percent, and AutoNation, up almost 30 percent since January, continue to make their stockholders smile.

Progressive Insurance has made big advances during the first half of 2003, with the price of a Progressive share up by almost 50 percent, considerably out-performing our INSIGHT Insurer Index, showing a 12 percent gain since the first of the year.

Most of the refinish manufacturers we track are down very slightly this month. DuPont is up less than one percent, but BASF stock, at $45 per share, is selling at nearly 20 percent over its January price.

Also on the plus side is Keystone Automotive Indus-tries. The company has reported record revenues and improved operating results for its fourth quarter and fiscal year ended March 28, 2003. In its fourth quarter, net sales increased 14 percent to $122.5 million from $107.9 million in the same quarter a year ago. Net income grew 20 percent to $4.9 million.

Collision repair facility owners across the country have been expressing, in our Market Watch telephone surveys, a determined belief that business will pick up during the warm weather months. Slowly but steadily, if the Stock Market forecast stays warm, it will.

-Charles Baker-

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