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Letter to the Editor

This article originally appeared in the February 2009 Issue of INSIGHT

I Plan to Buy Red Ink and Aspirin Stocks

Even with the January 1 startover of our stock chart this month, not a single Collision Repair Industry related stock that we track is posting a per share stock price at or above its New Years Day 2009 mark.

Despite fairly rapid movement toward passage of an economic stimulus package, and definite progress toward financial bailout money for GM and Chrysler, Wall Street remains decidedly skittish. The Dow continues to sink. Today, as I pen this commentary, it is over 100 points down from its January 15 posting of 8212.

In our chart, our refinish paint manufacturers are faring better than car dealers and insurers. Valspar, at $18.07, is off its New Years mark of $18.52 by just over two percent. PPG’s per share stock price is down less than five percent. Sherwin-Williams and DuPont’s shares dropped about six percent YTD. Akzo Nobel’s per share price is about nine percent off its January 1 mark of just under $44 per share..

Insurers are still getting clobbered on Wall Street. Allstate’s per share stock price continues to sink. The insurer’s price per share of stock is now down about 15 percent YTD. Progressive and Travelers per share stock prices are doing a bit better, but not by much.

What can I say good about the national auto dealers we track? Nothing! You can now buy a share of Penske stock for $7.35. Sonic Automotive’s per share stock price is down almost 30 percent already YTD, at under $3.

Something else that concerns me this month is the almost 12 percent drop in the Parts & Equipment Index in the first two weeks of 2009.

Financial advisors are telling us to hang on through what they are predicting will be about two years of pain. I see no fast relief in sight.

-Charles Baker-

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