Your Source for Up-To-Date News and Research on the Collision Repair Industry

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

This article originally appeared in the October 2007 Issue of INSIGHT

Strike Outs

The title I placed up top of this month’s article has been chosen for a few good reasons:

- Strike 1: The UAW strike against Detroit giant GM apparently came to an end in just two days. Although details of the agreement have not yet been released, unofficial word indicated that both sides at the bargaining table were satisfied.

It is believed that GM will move its unfunded retiree health care costs into an independent trust administered by the UAW. The union agreed to lower wages for some workers. In exchange, the UAW won commitments from GM to invest in U.S. plants, bonuses, and an agreement to hire thousands of temporary workers, boosting UAW membership.

Jaded industry analysts noted that such a short strike may actually have helped GM by reducing inventory levels. On Wall Street, The automaker’s per share stock price rose almost ten percent to $37.64 on news of the strike resolution.

Our auto dealer stocks, unfortunately, are still driving backwards this month at the Dow. AutoNation, CarMax, Sonic Automotive, and Penske Automotive Group are still in negative YTD territory. Their per share stock prices are down between 12 and 15 percent since the beginning of 2007.

- Strike 2: What is going on with our Collision Industry-related Insurance stocks these days? INSIGHT’s Insurer Index closed out in December up nearly five percent over its January 2006 mark, but has not been able to top its New Year’s figure by even one-half of one percent thus far. This month was its worst showing yet YTD - down over 11 percent.

Only Japan-based insurer Tokio Marine, up almost five percent since January, was in the positive column in September. Progressive, at $19.35 per share, was down over 20 percent, and Allstate dropped nearly 16 percent this month to $54.76 per share.

The Boyd Group continued its per share price growth this month at the Toronto Exchange posting a per share price of $2.70 Cdn. I do not know if Boyd will reach my predicted December goal of just under $4 Cdn, but the big North American consolidator is moving in the right direction.

- Strike 3: Aftermarket parts salvage company LKQ Corp-oration has continued to watch its per share stock price rise as the company ties up its acquisition of Keystone Industries. LKQ Corporate executives have enjoyed a very satisfying month. President and CEO Joseph M. Holsten exercized options for 300,000 shares at $4 to $7.50 each and then sold them all the same day for $31 apiece. A senior vice president sold one million shares, and a company director sold 500,000 shares. A tidy profit indeed.

The strikes this month are here of course because I am in Cleveland, home of the Major League Baseball Central Division champion Indians, and we all have baseball on the brain here. Go Tribe!

-Charles Baker-

Feedback

Have a comment about this article? Send Email to Charles Baker, INSIGHT's Publisher

SUBSCRIBERS-ONLY Today's News INSIGHT This Month INSIGHT Archives Survey Center Letter to the Editor

Business Tools Subscription Information CSI Reporting Financial Analysis IRS Audit Guide