I just re-read something I guess I overlooked or didn't take the time to absorb. We all know Chrysler just notified almost 800 dealers that they were dropping them and GM notified 1100. That's 1900+/- dealerships. However, the article I read that came out this morning says GM plans to close 40% of their dealerships by the end of 2010......that's 2400 not 1100. Counting Chrysler that's almost 3200 dealerships to be closed by next year. I figure these guys have an average of 24+/- bays each. At 24 average, that's 76,800 service bays eliminated between a few months from now and the end of 2010. This is a gold mine for PBY, MNRO, MDS, Firestone, Goodyear and a slew of others. There are also going to be tens of thousands of mechanics on the streets with the vast majority being ASE qualified. It's going to be time to pick and choose soon. DaninFW
These numbers certainly bode well for the retail auto repair/ parts industry. But when do you suppose PBY will morph from being a 'coat tails' participant in this industry to being a force to be reckoned with, along with MNRO, MDS, Firestone, Goodyear and the like? Won't PBY finally have to come up with a business model that will once and for all appease Wall St?
As I have said before.....PBY's has the weakest management team in the retail and service autoparts business. Only when they "morph" into a true caterpillar and deliver results close or comparable to their competitors will they get any respect vis a vis stok price appreciation with industry and sector PE multiples. Their hidden real estate values is the only thing that propped them up in the past. It will be at least 1-2 years before they can unlock that value again. In 16 days we will have our answer. As I have illustrated before, no one really has a clue what to expect on 6-10-09. If O'Dell has become the magnificent caterpillar he claims then we will have just south or north of 47 cents EPS on 6-1-09 before taxes. That's his numbers not mine.....I just took his random ramblings and did the math. The other catalyst will be if and when the BOD's replaces the COB who continues to liqidate his hedge fund positions in PBY. Dillard's is where he was tryig to get control last year and they ran him off and he liquidated his positions in DDS. DDS has since quadrupled since Barrington bailed out. Mitaratonda (sp?) was elected COB when his Barrington Fund had almost 3 times more stock than it does now and when it was the #1 shareholder. It is now the #3 shareholder. Almost all if not all of the curent BOD's except Pirate were on PBY's BOD's BEFORE Barrington so they have no allegiance to him. The BOD's need to go out and find a new COB that knows this industry....not someone just good at sale-leasebacks that aren't working right now. Anyone listening? Call Dillards......DaninFW