Small Caps Hoping for Lift from Booming U.S. Auto Sales

The month of May was a bummer for most investors, judging on the big hit all the major indexes took. But not for the nation’s Big Three automakers: Ford, General Motors and Chrysler, according to Marketwatch (http://www.marketwatch.com/story/big-three-auto-sales-roar-in-may-2012-06-01?siteid=bnbh). With the help of

Photo courtesy of Port Clinton Ford

 

looser credit demands for buyers, all three posted double-digit sales growth, according to the story, which was picked up by most major news outlets.

For General Motors, May 2012 was the best month of sales since August 2009 and 11 percent better than a year ago. GMC vehicles and Buick were up 19 percent and Chevy was up 10 percent, noted the Marketwatch piece. For Chrysler, which is adding production capacity “as quickly as possible,” it was the best month in five years. U.S. sales for Chrysler rose 30 percent in May and Dodge posted its 26-th consecutive month of year-over-year sales growth, the Marketwatch story noted.

Ford’s U.S. sales rose 13 percent led by the F-Series and E-Series trucks and the Fusion.

We’ve been covering a random mix of small cap auto dealerships and automotive-related companies that are suppliers, parts makers and partners of the major OEMs. Here’s a look at how they are faring: 

Duluth, GA-based Asbury Automotive Group (NYSE: ABG, http://www.asburyauto.com/) operates 79 auto dealerships in 18 metropolitan markets in 10 states. More than half of the dealerships are Toyota or Honda dealerships. Two months ago when we first looked at ABG it was trading at nearly $27. It closed June 4 at $24.30, down 49 cents on the day. Market cap is $766 million, 52-week trading range is $14.96-$29.62..

Bentonville, AR-based America’s Car Mart (Nasdaq: CRMT, http://www.car-mart.com/) sells older model used vehicles and vehicle financing at 113 dealerships in nine states. About two months ago CRMT was trading at just less than $44. It closed June 4 at $40.95, down $1.05 on the day. CRMT’s market cap is $384 million and 52-week trading range is $25.81-$48.24.

Houston-based Group 1 Automotive (NYSE: GPI, http://www.group1auto.com/) sells new and used cars, light trucks and auto parts, vehicle financing and insurance.  It owns and operates 131 franchises offering 31 automobile brands with 104 dealership locations, 25 collision centers in the U.S. and an additional five dealerships and three collision centers in the UK. As recently as April 3 it was trading for $59.15. GPI closed June 4 at $48.26, up 19 cents for the day. GPI’s market cap is $1.04 billion and 52-week trading range is $33.31-$59.97.

Charlotte, MI-based Spartan Motors (Nasdaq: SPAR, http://www.spartanmotors.com/) makes motor vehicle chassis and bodies for OEMs. Its stock was trading at about $5.50 last fall but has dropped pretty steadily since. SPAR had a good day June 4 when the stock closed at $4.43, up 23 cents for the day. The Wall Street Cheat Sheet recently picked SPAR as a company “to watch” based on the GM results and the general automotive industry. Market cap is $150 million and 52-week trading average is $3.65-$6.67.

Milton, GA-based Exide Technologies (Nasdaq: XIDE, http://www.exide.com/) manufactures lead-acid batteries for transportation and industrial energy applications. A year ago XIDE was trading in the $7.50 range, but has been punished by investors for disappointing Wall Street. The stock closed June 4 at $2.35, up 6 cents on the day. Its market cap is $184 million and 52-week trading range is $2.22-$8.

Northville, MI-based Amerigon * (Nasdaq: ARGN, http://www.amerigon.com/) makes a heated and cooled seat system now featured in 54 vehicle models manufactured by Ford, GM, Hyundai, Toyota, Nissan, Land Rover and Jaguar, as well as a cupholder for Chrysler.  Amerigon, which recently announced the acquisition of its main competitor, W.E.T. Automotive Systems of Germany, dropped as low as $6 in 2010 and then ran up as to highs of more than $18 last summer. But the market downturn has hit ARGN and its now trading just off its 52-week low. It closed June 4 at $12.05, up 21 cents on the day. Market cap is $356 million and 52-week trading range is $11.41-$18.18.

Racine, WI-based Modine Manufacturing Company (NYSE: MOD, http://www.modine.com/) manufactures a variety of thermal management products including radiators, engine and transmission oil coolers for the auto industry. This is the stock that Seeking Alpha in November 2010 listed as one of “10 Stocks on the Upswing.” It’s been on a downswing for the past year, considering last July it was trading for about $16 and closed June 4 at $5.73, down 21 cents for the day. Market cap is now $267 million, 52-week trading range is $5.67-$16.02.

* Denotes client of Allen & Caron, publisher of this blog

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