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Letter to the Editor

This article originally appeared in the June 2007 Issue of INSIGHT

Sailing Along

Well, the Dow continues to break records, up over 13000 as I put pen to paper. I suspect that some profit-taking will drop the index back to 12500 or so by mid-June, but it would seem that we will be continuing our voyage into the uncharted territory of 13000+ for the rest of the summer, and possibly beyond.

Do I have a map for the Collision Repair Industry ship’s course on the stock market sea? Will it lead me to a buried treasure? Ha! We have all learned the hard way that storms can brew on Wall Street faster than I can sail or paddle, so all I can do at best is point out a few nice beaches and a couple of grey clouds on the far horizon. (Do my seaworthy metaphors tell you that I have just seen the latest Pirates of the Caribbean flick?)

Winners this month in our Collision Repair Industry related chart are paint manufacturers Akzo Nobel and BASF, our best performers last month. Both companies’ per share stock prices are up nearly 25 percent over January postings. Vague rumors are still drifting out there that both companies are interested in each other. What is fact, for both companies, is that they have been succesfully trimming fat and dealing successfully with raw material and shipping price increases.

Our INSIGHT supplier index, up over five percent YTD, out-performed our industry related insurers this month. Insurers are wondering, at this early onset of a hurricane season that is predicted to be especially stormy, if U.S. shores will be hard-hit.

Three dealer groups in our stock chart are down this month. CarMax and United Auto Group stock prices are down about ten percent YTD, and AutoNation’s per share stock price is about three percent off from its January price. Sonic Automotive is up a bit, not quite one percent from its January price of $29.23 per share to $29.48. However, that price is about $1.25 over last month’s $28.31.

The Boyd Group has performed much better this month at the Toronto Stock Exchange. The body shop consolidator’s per share stock price is up over 36 percent from its New Year’s low of $1.20 Cdn. It will be interesting to see if Boyd management can implement cost-savings and office centralization across its widespread fleet of shops and get a handle on its U.S. facilities.

Solera Holdings, captained by Tony Aquila, successfully completed an Initial Public Offering (IPO) at the NYSE. Solera, provider of the Audatex estimating software, is trading under the symbol SLH. Offered initially at $16.00 per share, the stock is up 15 percent to $18.40 for one share. Note that Solera Holdings has been added to our stock chart.

Gas prices continue to climb at the pumps. Perhaps I should make my boating metaphor a reality in June. I don’t need gasoline for my sail or my oar!

-Charles Baker-

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