| Stock (Symbol) | Stock Price | |
LKQ Corp. (LKQ) |
$29 |
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| Data is as of | Expected to Report | Sector |
November 20, 2014 |
Feb 25 – Mar 02 |
Food & Necessities |
| Sharek’s Take | ||
 LKQ’s turned the corner, and is now going up. The stock has been down from $33 to $27 in January, then this NYPost article ran, and we’ve been going back-and-forth between $25 and $29 ever since. But now with LKQ having been at $29 for a month I think the stock’s turned up. That the negativity was bad, but still profit growth is set to average 27% the next 4 qtrs and the stock’s got a low P/E of 17. That usually means Huge Upside. But one thing that’s holding the stock back is priofit margins have been declining since 2005. Last qter margins were down 1% year over year, to 38%. Profit margins have been declining since 2005, as LKQ’s European sales have lower profit margins (and I think business is more competitive than it used to be in the states). LKQ has been aquiring to expand overseas. Last qtr Intl revenue increased 34%, as North America grew sales 10%, so continued expansion outside the U.S. is key for the stock. In early 2014 LKQ axquired Keystone Automotive, a leading distributor of auto parts in North America, and had it just had 13% year-over-year sales growth. Profits are expected to grow 27% the next 4 qtrs, and with a P/E of just 17 the stock has upside. I think this $29 has a Fair Value of $33 next year and $41 in 2016. This is a 20% grower and Auto Parts do well in poor economic times or stock market declines. |
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| One-Year Chart | ||
 I know it doesn’t look like LKQ turned the corner to some people, but I see a big saucer pattern developing. Est LTG of 22% is good compared to the P/E of 17. All the bottom numbers on the chart look good, as do the ones on the right. Everything here looks good. |
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| Earnings Table | ||
 Sales surged 33% last quarter as profits increased 19%.The company missed by a penny last quarter.I don’t like that Annual Profit Estimates came down this quarter. It’s just a little but still. I think that’s the lower margins bringing down profits. Quarterly estimates all look good, but came down some. This stock has a few weaknesses. |
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| Fair Value | ||
 The 16% upside into 2015 isn’t great. I want 20% or more. Maybe the stock is high right now, and close to selling. But it’s been acting strong so let’s see if it’s going to make a move. |
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| Ten-Year Chart | ||
 The reason I bought LKQ originally was its ten-year chart. Now I’m anxious for the stock to move up. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
19 of 24 |
LKQ’s turned up, profit growth could be 25% next year and the P/E’s 17. That usually means a nice run for the stock. But LKQ’s 2015 Fair Value is just $33. The stock’s $29 today, that’s not much upside. But then…I think this is a 20% grower after that. LKQ is ranked 18th of 22 stocks in the Growth Portfolio Power Rankings. In the end this is an OK stock but it’s not a Home Run with its 20-something-percent profit growth. LKQ isn’t in the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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