Fwiw, I've decided to start doubling down on my MPW position with the intent to lower my breakeven point.
Last quarter's report seemed okay to me:
birmingham.bizjournals.com
Auto retailers (e.g. LAD) have been doing well recently, possibly somewhat because "cash for clunkers" gets media attention as politicians consider this program. Also perhaps somewhat because the GM/Chrsler dealership closures may ultimately be beneficial to the large/diversified publicly-held dealerships.
I gave up on holding these auto dealership stocks earlier, and now it seems a little late to be reentering. However, as I look at Penske, its business and the stock still have some attractive features. Penske is fairly innovative: they have the USA Smart franchise, and now I read that Avis will have car rentals at selected Penske car dealerships/collision operations. As with all these publicly-held dealerships, the positives are they have several brands, their dealerships are dispersed around the country (PAG in UK, Germany, elsewhere too), and people will still be buying new cars or used cars or having need for collision repair. The main concern I see is that they all have large amounts of debt on their balance sheets, and the d/e ratio is, to my mind, very high.
That the stocks of all these companies in this sector are up sharply from lows, I interpret to be that the market is saying now that it looks like these companies will all come through the troubling times we are now in. I'll take a few shares of PAG today. Still wary though: PAG has about tripled from lows of two months ago.
finance.yahoo.com |
