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Letter to the Editor

This article originally appeared in the July 2004 Issue of INSIGHT

Summertime and the Living Is So-So

Despite a flat to lower Collision Repair Industry market, for both repair facilities and their suppliers, our industry stocks are outperforming the Dow this month. INSIGHT’s repair suppliers are up almost ten percent overall and the Dow is down a hair.

I can’t really report that the industry is in terrific economic shape, but considering the cold hard fact that there are less repair orders to go around, I have to say the climate is fair to middlin’.

Even if we exclude Accessity Corp. and eAutoClaims, both of which showing hefty YTD price per share increases that signify who-knows-what, our supplier index is still up over six percent since January.

Sherwin-Williams shares continue to outperform our other refinish paint manufacturers this month. The Cleveland-based company’s per share price is almost 15 percent higher YTD, at $39.24 per share.

Both Copart and Insurance Auto Auctions appear to be seeing happy justification for their considerable investments in upgrading and improving their software systems last year.

These two national vehicle auction site companies are performing well in the Stock Market. Copart shares are up almost 50 percent in price YTD, and Insurance Auto Auctions, at $16.05 per share, is up almost 23 percent since the beginning of 2004.

AutoNation and the United Auto Group have got to be looking forward to the arrival of the 2005 models and the hopefully anticipated upsurge in new and used car and truck purchases in the Fall. Both dealership groups’ stock prices are still down a bit this month from their initial 2004 levels.

Automatic Data Processing had a good month on Wall Street. The company’s per share price was up over 11 percent YTD.

CCC Information Systems saw its per share price climb a bit from last month’s $14.00, but the company has a way to go yet to get back to its January level of just under $17.00 per share.

Our insurers are all performing steadily and slightly better since January. The word from shop owners around the country is that insurers are definitely staying concerned about both costs of repair and turn around times. Get used to it - This will never change.

INSIGHT is also hearing that insurers are taking a very close look at their direct repair programs. Changes seem to be in the wings.

The Boyd Group appears to be gearing up for more acquisitions in the U.S. It will be interesting to see what metropolitan markets appeal to this consolidator from Canada. The company’s decision recently to use the name of its Illinois-based acquisition, Gerber Auto Collision & Glass for its facilities in the U.S. indicates that the Midwest may see some consolidating activity, based on brand recognition of the well-known Gerber name.

Happy Independence Day to all our readers here in the great USA!

-Charles Baker-

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