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Letter to the Editor

This article originally appeared in the March 2005 Issue of INSIGHT

March coming in Like a Lamb?

There was very little movement to notice this month on the part of our Collision Repair Industry stocks. March will be coming in like a lamb, not a lion, at least on Wall Street. I never thought that I would ever declare that eAutoClaims and DriverShield (now part of Accessity Corporation) advanced the most in any month, but strange things can happen on Wall Street.

At any rate, Accessity’s per share price, at $7.25, is up almost 32 percent over its beginning of the year mark, and eAutoClaims is up 30 percent to 26 cents per share.

Among our paint manufacturer stocks, all but Valspar have moved ahead slightly, with anywhere from a two to five percent YTD rise in per share prices.

Valspar’s Q1 report was probably at least partly to blame for the almost six percent drop in the paint maker’s share price. The company's quarterly profit fell 36 percent. A Valspar press release blamed sharply higher raw material costs that offset increased sales. Sales for the quarter increased 11.1 percent to $557,144,000, compared to $501,591,000 last year. Valspar is usually a very steady performer at the Stock Exchange. I expect some cost-cutting measures to come into play, along with the already decided product price increases.

This month it seem that Copart, the auction site consolidator, hit a bump in what has lately been a smooth road. The company’s stock price is down almost 15 percent since January 1. This bump in the road will not slow Copart’s acquisition movement. The company recently opened its seventh salvage yard in the state of Florida, in Ocala, and its 20th in the Southeastern region, in Knoxville, Tennessee. I am confident that Copart will have an overall good year on Wall Street.

Keystone Automotive Industries, Inc. reported record sales for its fiscal third quarter that ended December 31, 2004. Net sales increased 8.2 percent to a record $136.6 million compared with $126.3 million last year. Net income, at $4.0 million, or $0.25 per diluted share was down from $4.5 million, or $0.29 per diluted share, a year ago. Net sales for the nine months increased 12.2 percent.

Insurer stocks are certainly holding their own, although their stock prices have remained virtually unchanged since the beginning of the year.

Allstate, in particular, shines. The insurer’s Q4 net income shot up nearly 50 percent on premium growth and gains in underwriting income. That news is especially impressive after the losses faced from the four major hurricanes in the third quarter.

As far as the industry Big Picture goes, overall, it would seem that collision repair facilities did not get crowded with vehicles during the Winter months. I believe the Market is flat and will stay about one percent up or down from where it is now for at least the first half of 2005.

-Charles Baker-

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