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 December 2007 Issue of INSIGHT

Ups and Downs

What a month this was for Wall Street. The Dow went up and down faster and farther than the elevator at the Empire State Building.

Our automotive refinish stocks have had a mixed showing this month in the Stock Market. Akzo Nobel, with a per share price of almost $76, up over 22 percent YTD, was quite far ahead of the other refinish paint manufacturers. Sherwin-Williams posted a slight backslide, down a hair under two percent YTD. PPG Industries, at about $67 per share, was up nearly five percent YTD. DuPont was down nearly seven percent YTD, and Valspar, at just over $25 per share, was off its start of the year posting by about ten percent.

The LKQ board of directors approved a two-for-one split of the company's stock. Each stockholder of record as of November 16 has received an additional share for every outstanding share owned, with trading on a split-adjusted basis as of December 4.

Ever since the company’s acquisition of Keystone Automotive, LKQ’s per share stock price has been rising. At nearly $39 per share, the stock is up nearly 68 percent YTD. I have to wonder if this upward path will continue over the first few months of 2008. That Earnings PE of 39 is a caution light to this investor. I cannot see any upward growth in the automotive aftermarket market happening in the New Year.

Solera Holdings, parent company of estimating software provider Audatex, has been off to a good start since its IPO earlier this quarter. With a per share stock price of just over $22, Solera’s stock has risen almost 40 percent since the company’s debut at the NYSE.

The languishing stocks in our chart this month are once again the listed automobile dealerships. AutoNation’s per share stock price sank 21 percent from its January posting to below $17 per share. CarMax was down about 14 percent YTD. Sonic Automotive’s per share stock price dropped over 16 percent YTD, to a bit over $24 per share, and Penske Automotive Group, posting a per share stock price of just under $21, was off its January mark by nearly 12 percent.

Both AutoNation and CarMax had some high profile investors at the purchase desk in the second half of 2007. Billionaire investor Edward Lampert, chairman of Sears Holding Co., purchased a hefty chunk of AutoNation shares in mid-November, increasing his stake in the automotive retailer to over 29 percent. Warren Buffett's Berkshire Hathaway acquired almost 14 million shares of CarMax during the third quarter. The stock was bought by GEICO, the auto insurer, a subsidiary of Berkshire Hathway.

Our Insurance stocks have remained in the negative column this month. Progressive’s per share price dropped to under $19, almost 23 percent off its January price, and Allstate was down over 18 percent YTD to about $53 per share.

What will the New Year bring? On Wall Street, I am not sure, but I wish for a happy and prosperous New Year to all of you!

-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