If You Invested $1000 in LKQ a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in LKQ (LKQ) ten years ago? It may not have been easy to hold on to LKQ for all that time, but if you did, how much would your investment be worth today?
LKQ's Business In-Depth
With that in mind, let's take a look at LKQ's main business drivers.
LKQ Corporation is one of the leading providers of replacement parts, components, and systems that are required to repair and maintain vehicles. Using these parts improve the functionality and performance of vehicles. The company distributes aftermarket collision and mechanical products, recycled collision and mechanical products bumper covers and lights; as well as remanufactured engines and transmissions. LKQ Corp provides alternative vehicle collision replacement products and alternative vehicle mechanical replacement products in the United States and Canada. Further, the company provides alternative vehicle replacement and maintenance products in the U.K., Germany, the Benelux region (Belgium, Netherlands, and Luxembourg), Italy, Czech Republic, Poland, Slovakia, Austria and various other European countries. Besides wholesales, it also offers recycled automotive products at its self-service retail facilities across the United States.
The company has four operating segments — Wholesale - North America, Europe, Specialty and Self Service. However, since Self Service unit is present only in the United States, the segment and Wholesale - North America have been aggregated into one.
Currently, the company’s three reportable segments are:
North America (39.8% of revenues in 2020): The segment sells aftermarket, recycled, remanufactured, refurbished and OEM parts to professional collision and mechanical automobile repair businesses. The self-service operation works under the name “LKQ Pick Your Part” that enables consumers to pick parts off salvage vehicles.
Europe (47.2%): The segment is expanding its presence in Europe through acquisitions. The latest acquisition is of a leading European wholesale distributor of aftermarket spare parts, Stahlgruber in 2018. Prior to this, it acquired Rhiag in 2016, Sator in 2013 and ECP in 2011.
Specialty (13%): The segment was formed after the acquisition of Keystone Specialty in 2014. The business line specialty vehicle aftermarket equipment and accessories across major markets in the United States and Canada for six product segment include RV, truck and off-road, towing, speed and performance, wheels, tires and performance handling as well as miscellaneous accessories.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For LKQ, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in July 2011 would be worth $3,851.25, or a 285.13% gain, as of July 16, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 231.27% and gold's return of 10.23% over the same time frame.
Going forward, analysts are expecting more upside for LKQ.
One leading providers of replacement parts, LKQ, is benefitting from strategic buyouts. Elite Electronics buyout is driving the sales and profit of the company. Acquisition of Greenlight Automotive is also set to bolster LKQ’s prospects. The focus on cost discipline and simplifying its operating model is likely to result in sustained margin expansion. The firm’s Specialty segment is witnessing massive growth and the trend is likely to continue on robust demand for recreational vehicles (RVs) and RV parts. Encouragingly, LKQ has also upgraded its 2021 outlook, which instills investors’ confidence. Further, LKQ’s balance sheet strength increases the financial flexibility of the firm and reflects lower default risk. Given the tailwinds, LKQ is currently viewed as a lucrative bet.
Shares have gained 5.69% over the past four weeks and there have been 2 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
LKQ Corporation (LKQ) : Free Stock Analysis Report
To read this article on Zacks.com click here.
