Allstate and APCO news.....
The recent agreement with Allstate has the potential of being HUGE for APCO in several ways. Allstate serves approximately 15% of the insured automobiles in the United States. They sell policies in all 50 states.
Besides the obvious increase in revenues and income from this agreement, I think it will or could have a big impact on the following,
1. When approaching new dealerships they will be able to use Allstate's household name as one of their clients.
2. In creased exposure in areas or states where APCO is selling very little if at all. Including the four largest markets, California, New York, Texas and Florida ( SAH is helping a lot in Florida now )
3. Signing of this deal might help solidify or close existing deals that APCO is currently working on.
4. Increased exposure and awareness due to Allstate's marketing directly to their policy holders.
According to Todd, the Allstate agreement will basically work like this,
Allstate will be in charge of all marketing. Apco will be in charge of customer service, handling and processing claims. After all, this is why Allstate picked Apco. They do it the best!
Allstate will be able to offer warranties to both existing and new policy holders. The vehicles will have to be 5 years old or less ( it might be less than 5 years old). They will have to have had the factory warranty such as 36 months or 30,000 miles or have purchased a warranty that they would like to extend to that five year term.
Todd also told me that the other deal that they were close to having completed is almost done. He also said that it is with a well known company and that he was still cautious because a deal is not a deal until it is signed. He could not give a date because of this but was hopeful that it would be very soon.
With the addition of Allstate and possibly another recognizable household names revenues and income it is possible that a couple of other things might happen,
1. Large household names..... possibly large analysts or large firm coverage
2. Because of the increased exposure and household name(s) it is quite possible that APCO could trade at a higher PE than it is currently at based on anticipation of future growth from the likes of Allstate along with continued growth from their existing and new dealers with their easy care certified and soon to be released easy care standard
programs.
3. Almost forgot... According to Todd, the agreement with Allstate is not an exclusive agreement. They can sell the same type of program to other insurance companies if they like.
Anybody have any thoughts?
Cary |
