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Letter to the Editor
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This article originally appeared in the February 2010 Issue of INSIGHT

Gently Does It

As I look at our Industry Stock Report chart, with its new comparisons to New Year’s Day 2010, I feel a certain gentleness in the air. In our list of stocks that we track, there is no higher or lower posting on January 15 more than eight percent above its beginning of the year spot. I may have actually survived the “Great Recession,” with my blood pressure marks at a steady good place at last. Yes, 2009 was a grim year! I am hopeful that 2010 will bring a nice, gradual, safe recovery - to Wall Street and to my nerves.

Although aftermarket parts company LKQ, with a just under $20 per share price, is up only about one and a half percent YTD, the company reported a very nice 28 percent increase in profits for 2009. LKQ hit a milestone last year, surpassing the $2 billion revenue mark, too.

Penske Automotive Group is the big winner at the Dow this month, with a per share stock price of $16.24, almost seven percent over its New Year mark. The national auto dealership group just reported earnings of $18.7 million in the fourth quarter of 2009. Retail sales are definitely showing signs of recovery for Penske in the U.S., and retail revenue rose in the United Kingdom by nearly 40 percent.

The other national dealership groups did not do quite as well as Penske this month. Sonic Automotive posted a per share price nearly three percent over its January 1 mark. Auto-Nation’s per share price dropped just a hair, but CarMax was the loser this time, with its per share price dropping nearly eight percent YTD to $22.56.

Our refinish paint manufacturers were in the same boat - a little up or a little down YTD. Akzo Nobel’s per share stock price was down about six percent to $62.90. Sherwin-Williams posted a per share price off its New Year’s mark by just under five percent, and PPG Industries was up by about the same percentage. DuPont and Valspar posted per share prices just a tad above their January 1 marks.

The Dow Jones Average and the Parts and Equipment Index both outperformed our indices this month, but I am thinking that we will see some slow improvement before we thaw out from the Winter.

I do believe, too, that collision repair facilities will finally have a busy couple of months across the country. Winter weather has never had a gentle touch on our cars!

-Charles Baker-

 

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