As icy roads from this epic U.S. winter thaw, more people and
businesses will be hitting the highway, with the demand for auto
replacement parts in tow. Last week, original equipment
manufacturing for auto and truck replacement parts
(AUTO/TRUCK-REPL) was shining at the #1 rank on the
Zacks Industry List
. You can't do better than that!
This industry of 8 companies recently saw 12 positive revisions to
annual earnings estimates compared to 4 negative revisions.
Positive earnings surprises have been averaging a strong +20%. Of
course, downward earnings surprises are present. However, the
sector has signaled a turn for the positive, and a couple
businesses seem to have the green light.
We've seen this trend reflected in a downstream part of the auto
value chain -- Retail/Wholesale Auto Parts. This is a six-company
industry also at a #1 rank on the Zacks Industry Rank this week.
With a continued build in play for cyclical auto spending, the
picture is one with important indicators of strong and broad demand
trends. That will drive future positive earnings estimate
Significant upward revision of the Zacks Rank within an industry
group, changing from a Hold to either a Buy or Strong Buy rank, is
a sound signal when looking for investment advantages. Using
knowledge of recent positive earnings estimate revision activity by
company analysts in the know provides that key insight.
Look closely at the following summaries of two high Zacks Rank
candidates. Each was selected based on its current Zacks Rank #1
(Strong Buy) or Zacks Rank #2, and a recent revision from Zacks
Rank #3 (Hold).
Your profits could mirror these successes. Those returns may be
closer than they appear.
Motorcar Parts & Accessories (
With a stunning 29% YTD return, these shares have been a momentum
play in 2014. It's a Zacks Rank #1 stock in a Number One Zacks
Ranked Industry. What more is there to say? The last three earning
beats were +47%, +33% and +50%.
This company is a leading manufacturer of replacement alternators
and starters for imported and domestic cars and light trucks in the
U.S. and Canada. The company's full line of alternators and
starters are remanufactured for vehicles imported from Japan,
Germany, Sweden, France and Korea. The imported vehicles for which
the company remanufactures alternators and starters also include
vehicles produced by GM, Chrysler and Ford.
With a 7% return YTD, this Zacks Rank #2 company has been
delivering in a sideways market. For 2015, analysts look for +15%
annual EPS growth on +9% revenue growth. For a U.S. company, that's
an "outperform" story. Dorman beat or met quarterly earnings in
eight of the last ten quarters.
This company is a leading supplier of Dealer "Exclusive" automotive
replacement parts to the Automotive Aftermarket and Mass
Merchandise markets. Dorman automotive parts and hardware are
marketed under the OE Solutions, HELP, AutoGrade, First Stop,
Conduct-Tite, Pik-A-Nut and Scan-Tech brand names.
DORMAN PRODUCTS (DORM): Free Stock Analysis
MOTORCAR PARTS (MPAA): Free Stock Analysis
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