LKQ Corporation (NASDAQ: LKQX) is
the largest nationwide provider of aftermarket collision replacement products, recycled original equipment products and refurbished replacement products used to repair light vehicles. The company operates approximately 300 facilities, offering its customers such components and systems as engines, front end assemblies, doors, transmissions, bumper assemblies, wheels, head and tail lamp assemblies, mirrors, fenders and axles. Clients include repair shops and insurance firms, including extended warranty companies.
LKQ pleased investors last week, when it reported Q4 EPS of 15 cents and revenues of $414.7 million. Analysts had been expecting 11 cents and $392.9 million. Management also guided FY08 EPS to 73-77 cents (66 cent consensus). RBC Capital Markets and Barrington Research subsequently reiterated "outperform" ratings on the stock and declared price targets in the $24-$27 range.
The share
price popped on the news and then moved into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the issue with eight "strong buys", four "buys" and two "holds". Analysts see a 27% growth rate, through the next year. The LKQX Sales Growth rate (102.76%) and EPS Growth rate (66.67%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 93% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $10.16 and $23.66. A stop-loss of $18.75 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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