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Letter to the Editor
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This article originally appeared in the June 2004 Issue of INSIGHT

June Is Bustin Out All Over?

The “Merry Month of May” has been fairly calm on Wall Street. I am looking for some wood to knock on even as I write the words!

Our president has been speaking to sooth the jitters many Americans are experiencing this month about the continued fighting in Iraq, so I expect the Bush administration is very relieved to have no major turmoil on the economic side with which to deal. Encouraging statistics have indicated some growth in U.S. manufacturing, too.

Latebreaking news for our Collision Industry Supplier Index has come from Earl Scheib, Inc. The company has announced that its board has approved the execution of a Letter of Intent with Elden Holding Group, LLC, a private real estate investment company (See page 13.). Elden will acquire all of Earl Scheib’s stock by the terms of the agreement. Earl Scheib was founded in 1937 and operates over 100 auto paint and body shops in 100 cities throughout the U.S.

It is hoped that the new owners will keep operations going, and under the well-known name, a real landmark for many of us old-timers.

Sherwin-Williams continues some dynamic monvement this month, with an announced acquisition of Duron, a paint and wallpaper manufacturer. The company’s per share stock price is up again for May, at just under $37.

Akzo Nobel, BASF, DuPont, PPG, and Valspar, the other refinish manufacturers in our supplier index, continue to stall in the Stock Market. Valspar’s stock price is down about three percent YTD, and the others are all down around ten percent.

I am confident that the cost-cutting programs in place at Akzo, BASF, DuPont, and PPG will produce better results for the companies before the end of 2004.

Both of the auto auction facilities we track continue to improve. Copart is up almost eight percent in per share stock price, and Insurance Auto Auctions is up almost 15 percent YTD.

Car dealerships AutoNation and United Auto Group did not fare well this month. Both were down over ten percent since January. United Auto Group acquired six franchises in Northern California, a new market territory for the company.

FinishMaster, although not listed in our stock chart since the distributor went private in 2003, reported increased earnings in the first quarter. Acquiring Automotive Refinish Technologies last year was a good move for FinishMaster.

It is interesting to note that our supplier index is up just under two percent YTD, out-performing our insurer stocks by just a hair, but still nice to see. It is even nicer to see that our INSIGHT Fund is up almost 12 percent YTD.

Will June be a good month for the Collision Repair Industry? I think it will remain calm with some business for shops from vacationers’ fender-benders. Despite the over $2 per gallon gas prices, it’s summer - time to hit the road!

-Charles Baker-

 

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Sherwin-Williams Automotive Finishes

DuPont Automotive Refinish

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