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Letter to the Editor
This article originally appeared in the August 2005 Issue of INSIGHT
Nickels and Dimes
This month’s Collision Repair Industry Stock Report shows some backsliding from last month’s tiny step upward, but I am still hoping that the year-end chart will look a lot like our January chart. Sigh.
Our Supplier Index has dropped back to almost 14 percent below its January standing.
Our Insurer Index is up almost nine percentage points from its January starting place, with Progressive’s per share stock price up to almost $98, a 14 percent increase from its 2005 starting price.
As of July 15, our refinish manufacturers’ per share stock prices were still each down about six percent YTD, except for Sherwin-Williams and Valspar.
For Sherwin-Williams, the Cleveland-based paint manufacturer’s per share stock price jumped to a nice round $48, up nearly eight percent from its January $44.57.
Valspar’s per share stock price was up a nickel from its start of the year mark of $48.90. In this steamy July’s sluggish Market, that nickel is looking pretty shiny to me.
Two of our car dealership stocks, AutoNation and United Auto Group, are showing a bit more improvement on Wall Street. Both dealer consolidators have per share stock prices up about ten percent from January prices.
CarMax, however, is still trying to inch upward after the company lowered its earnings and sales targets for the last quarter. CarMax’s per share stock price has improved from its June price of nearly 20 percent off its January $31.00 level. The company’s July per share stock price of $27.31 gives me hope that CarMax will move slowly upward during the last half of the year at the Dow. I am still predicting that CarMax will be out of the woods by December on Wall Street.
Insurance Auto Auctions, Inc., acquired last month by an affiliate of Kelso & Company, a New York based private equity firm, appears to be staying on its course of purchasing vehicle auction sites. The company’s recently announced acquisition of Sadisco of Charleston, located in Ravenel, South Carolina, brings to 80 the number of Insurance Auto Auction facilities in the U.S.
In Canada, the Boyd Group Income Fund units are sinking even lower this month, still apparently suffering from the collision repair consolidator’s nearly 40 per cent cut in its distribution in June. Boyd’s per share price in Toronto is down over 42 percent YTD. That’s a big red number to improve in the six months left in 2005. I still believe that Boyd executives are building a strong company. In the long run, I am betting on the Boyd Group.
Keystone Automotive Industries has shown some nice improvement this month at the Stock Exchange. The news that TYC, one of the world’s biggest manufacturer of aftermarket lighting, has joined CAPA (See page 3), is good news for Keystone.
LKQ, our Supplier Index’s other aftermarket parts distributor, saw its per share stock price jump over 36 percent YTD this month, to $27.38 per share. That is a stack of nickels and dimes over its January figure of $20.10.
-Charles Baker-
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