בס״ד

Auto Wreck Scatters Car Parts Everywhere (GPC)

Posted on September 22, 2022

Genuine Parts Company (NYSE:GPC) is best known in the investment world for its dividend payout record.

The company has an unbroken, 66 year history of raising its shareholder remittance at least once every twelve months.

And that’s impressive.

At the same time, stocks don’t drive one way northbound forever.

And it looks to us like GPC’s latest 30% run higher – in just three months – is overheated.

Like a ’69 GTO With the Ram Air II Package!

Anyway, for all of GPC’s hydraulics, pneumatics, hoses and gaskets, this Atlanta, Georgia outfit’s race has now been run.

Look at the fundamentals –

  • P/E is relatively normal (for this market) at 20.35,
  • Dividend Yield is 2.26,
  • Price to Book is a burning 6.11 (!), and
  • Analysts are expecting five year growth of just 4.60% per annum.

Bottom line is the stock began making moves this year when the prospect of buying a new car took a back seat to holding on to the old jalopy, because no one had any money.

Going forward, though, prospects are devilishly flat.

  • Supply chain issues,
  • Chip shortages,
  • Higher operating costs, and
  • Increasing commodity prices

are all taking a bite out of earnings.

And that’s not likely to change soon.

Now look at the chart –

And a nasty election on the way.

And the FED.

And climate change lockdowns.

And inflation.

And civil strife.

And who knows what the hell else…

In other words, book it.

And may the Good Lord keep you and yours safe from the evil that’s mushrooming all about us.

Many happy returns!

Matt McAbby

 

Leave a Reply

Your email address will not be published.