LKQ Corp.: Buy At $50 And Reap The Business Integration Rewards

Nov. 30, 2022 11:50 PM ETLKQ Corporation (LKQ)2 Comments
Mark Van Mater profile picture
Mark Van Mater
342 Followers

Summary

  • LKQ offers its customers quick delivery on a broad range of OEM recycled and non-OEM aftermarket parts, replacement systems, components, equipment, and services to repair vehicles.
  • LKQ has shifted its focus to integrating its businesses and improving its cost structure and will aim to make smaller tuck-in acquisitions as opposed to larger deals.
  • FX rates and divestitures caused Q3 revenues to be 5.9% below last year, and 2022 EPS guidance was reduced from $3.95 to $3.90 due to rising costs, FX, and taxes.
  • LKQ trends in EPS, P/E Ratio, and Operating Margin provide good indications for stock price direction.
  • Wait and buy LKQ at $50 and then sell the May 19th $50 call to boost your return while collecting dividends.
Scrap Vehicles

OwenPrice

Investment Thesis

LKQ Corporation (NASDAQ:LKQ) will see higher stock prices due to cost reductions from business integration and growing demand as more cars are on the road each year, and the average age is increasing. The company helps collision and mechanical

This article was written by

Mark Van Mater profile picture
342 Followers
I have 27 years' experience in sales and marketing where my strength was always research and analysis.  I now have 12 years' experience as a full-time investor and independent research analyst. My primary focus is on value stocks showing strong growth potential.  The 3-part strategy includes recognizing macro trends, seeking innovation and capitalizing on event overreaction. The process begins by running filters with 28 key criteria, then continues by considering over 120 data points on each investment. I listen to quarterly earnings reports and read 10Q reports. Fundamental Analysis is used to select stocks, and Technical Analysis plus Artificial Intelligence are used to identify the entry, trend, and exit points.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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