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Letter to the Editor

This article originally appeared in the April 2008 Issue of INSIGHT

Gloomy March

March was a gloomy month indeed on Wall Street. Banks and financial institutions are grappling with problems they share with the U.S. housing and credit industries. Whispers of recession are chilling stock investors to the bone. Experts are finally taking note of inflation in the economy. Duh - anyone who has walked the aisles of a grocery store has been well aware of price increases for goods. At the pump, there are predictions of $4 per gallon of gas by Summer vacation time.

Only a handful of our Collision Industry-related stocks and one insurer did not lose ground this month from their January 1 mark. DuPont is still hanging on to a slight increase in its per share price, about six percent higher YTD, and Japan-based Millea reached a just over 12 percent rise per share.

Akzo Nobel’s Fourth Quarter results beat analysts’ expectations. The Dutch paint manufacturer still has deep pockets this year, too, even after its acquisition of ICI in the UK in 2007.

Our other automotive refinish stocks were a bit down in the dumps this month. Valspar and Sherwin-Williams posted per share stock prices about ten percent below their January marks. PPG sank nearly 17 percent YTD, down to just a hair over $59 per share.

February, for our national car dealer consolidators was, surprisingly, a pretty good month. March has been a bit harsher. AutoNation, at $13.77 per share, is almost $2 below its New Year price. CarMax and Sonic Automotive continue to stall on Wall Street. Both are still trying to get back to their January per share positions. Penske Automotive Group continues to move slowly forward, up just a hair under 5 percent YTD.

Our auto insurers continue to struggle at the New York Stock Exchange. SAFECO, with a per share stock price of just over $42, has dropped over 23 percent since the New Year. Allstate is down over 12 percent YTD, and Travelers is off its initial mark by about 16 percent. Progressive per share stock price may not get back up to its beginning of 2008 posting of just over $19 in this calendar year. The Cleveland-based insurer’s per share stock price continues to drop. At $15.47 per share, the price is down almost 19 percent YTD.

Claims statistics are continuing to indicate an increase in the number of collisions across the nation. Collision repair facilities in the U.S. are worried, though, that record-breaking price hikes at the pumps may may keep Americans within walking distance of their homes because of ever-rising fuel costs.

-Charles Baker-

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