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Letter to the Editor

This article originally appeared in the December 2009 Issue of INSIGHT

Bah Humbug!

In this final month of the year 2009, our Collision Repair Supplier Index is nearly 34 percent above its mournful beginning of the year posting. This is good, very good in fact, but a bit puzzling. The Dow is up less than half of that - just about 15 percent over its January figure, and our industry-related insurers are up merely six percent YTD. What is going on with our Collision Industry stocks?

Now do I sound like a grumbling Ebenezer Scrooge, or am I the voice of Reason today? Bah humbug! I am pleased that all but two of the stocks we track are doing so nicely, but I do not understand why that is so.

The national auto dealerships are ending 2009 with vehicle engines purring. An AutoNation share, with a per share price of $18.28, is nearly 72 percent higher than its New Year’s price. Penske Automo-tive Group is up almost 94 percent. Sonic Automotive and CarMax are even farther along the road, with per share stock prices up a whopping 124 percent and 152 percent respectively. Can this kind of improvement continue? For sure it is a great time to buy a car. Dealers seem ready to offer continued bargains, but I see hesitation and worry from the buyers’ perspective.

On a personal note, yesterday I found a parking space close to the local mall entrance and did not see many shoppers out and about, even at what should be the height of Holiday Season shopping.

Our refinish manufacturers are having a good month on Wall Street. Sherwin-Williams is the only paint maker that is still about at its $59.99 year-opener per share price. Akzo-Nobel, at $65.14 per share is up nearly 50 percent YTD, as is Valspar, at $27.59 per share. PPG’s current share price of $60.36 is up about 40 percent, and DuPont’s per share price is up 31 percent YTD, at $34.31.

The first big snowstorm of the season hit areas from the Rockies to New England last week. Many collision repair facility owners are hoping to see a much-needed jump in business because of the storm. Amazingly, the bad weather jumped right over INSIGHT’s hometown, despite weather forecasts predicting up to a foot of snow. All I have seen so far is a light dusting of the white stuff here in Cleveland.

Happy Holidays to our readers, and best wishes for a prosperous New Year!

-Charles Baker-

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