Genuine Parts Company Stock Analysis – View the Pullback as a Buying Opportunity

Summary

  • GPC released Q3 results below expectations on October 19 which has resulted in a ~8.5% drop in stock price.
  • Two additional bolt-on acquisitions were announced October 19 with closings to occur November 1. No definitive closing date has been revealed regarding the acquisition of Europe’s Alliance Automotive Group.
  • GPC, established 1928, has previously successfully navigated challenging competitive conditions. Management is taking steps to expedite corrective action.
  • Industry dynamics presents an opportunity in that GPC is likely to be a consolidator of smaller competitors.
  • Amazon’s expansion into GPC’s automotive parts segment will appeal to the DIY/consumer market (25% of GPC’s business in that segment). Amazon is unlikely to be able to adequately service the commercial segment.

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Genuine Parts Company Stock Analysis – This Company Suits My Investor Profile

Summary

  • This Genuine Parts Company stock analysis is based on its Q2 2017 results which were reported July 20, 2017.
  • Total sales were up 5% to a record setting $4.1B, net income was $0.19B, and EPS increased 1% to $1.29 versus Q2 2016.
  • YTD FY2017, businesses with approximately $0.18B in annual revenues have been acquired. GPC has also made a minority investment in a market leading industrial distributor in Australia.
  • Management is of the opinion the long-term fundamental drivers for its U.S. automotive aftermarket business remains sound.
  • With a track record of 61 consecutive years of dividend increases, GPC is a member of the exclusive Dividend King group of companies (50 consecutive years of dividend increases).

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