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LKQ Corporation: Set To Fall

LKQ Corporation (NASDAQ:LKQ) distributes vehicle replacement parts used in the repair and maintenance of vehicles and recreational vehicle appliances in North America, Europe, and Taiwan. The company also operates self-service retail operations under the LKQ Pick Your Part name.

The last year has been a bumpy ride for LKQ shareholders, down 3% and underperforming the GICS Distributors subindustry by 6%. The subindustry includes Genuine Parts Company (NYSE:GPC), another auto parts distributor, and distributors in different market segments, such as Pool Corporation (NASDAQ:POOL) and Core-Mark Holding Company, Inc. (NASDAQ:CORE).

The weak stock performance of late is a result of revenue misses on the last two quarters, which could be a result of the recent M&A activities and divestment of the OEM glass business.

Company Fundamentals

Both revenues and profits have been steadily increasing for several quarters as the company expands its European presence, primarily through acquisition.

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by Steve Auger


Genuine Parts Company: The Unwavering King Of Dividends

Genuine Parts Company (NYSE:GPC) distributes automotive and industrial replacement parts, office products, and electrical/electronic materials in the United States, Canada, Australia, New Zealand, Mexico, and Puerto Rico. GPC has four divisions: Automotive Parts Group [APG], Industrial Parts Group or Motion Industries [MI], Office Products Group or S.P. Richards, and the Electrical Products Group or EIS.

The last year has been a disappointment for GPC shareholders, down 0.6% and underperforming the GICS Distributors subindustry by 3%. The subindustry includes LKQ Corporation (NASDAQ:LKQ) which is an auto parts distributor, and distributors in different market segments such as Pool Corporation (NASDAQ:POOL) and Core-Mark Holding Company, Inc. (NASDAQ:CORE). GPC's weak stock performance is primarily due to poor revenue growth, impacted by challenging market conditions.

Company Fundamentals

Both revenues and profits have been essentially flat for the last three years. According to GPC management, the U.S. sales environment has been challenging, but international operations in Canada, Mexico and Australasia, outperformed with stronger, more positive results.
 

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by Steve Auger