Friday, December 5, 2014

Stock On The Radar


Motorcar Parts (MPAA) reported their sixth consecutive positive earnings surprise in mid-November. The main driver behind the earnings growth was new business wins for their wheel hub and brake master cylinder business.
This company is a leading manufacturer of replacement alternators and starters for imported and domestic cars and light trucks in the United States and Canada. The company's full line of alternators and starters are remanufactured for vehicles imported from Japan, Germany, Sweden, France, and Korea.
Motorcar Parts also saw growth in several other key areas during the quarter. First, net sales increased 7.1% YoY, Adjusted net income almost doubled from last year, and Adjusted gross profit saw a 37.5% increase. According to CEO Selwyn Joffe, they have seen "strong interest in our new product introductions and solid growth in rotating electrical. An aging vehicle population, lower fuel costs, and positive operating synergies support our growth potential." 
Q2 2015 was the sixth consecutive positive earnings surprise by this company, and not only did they beat expectations they crushed them. Over the past four quarters Motorcar Parts has posted an average positive earnings surprise of 35.24%.
Motorcar Parts of America's new Brake Master Cylinder sales generated $2.7 million while only coming online in late July of this year. Further, organic growth of Rotating Electrical was 9.8% YoY, while organic growth and Wheel Hub sales grew 69.8% YoY. This indicates strong demand for Motorcar Parts new products and existing parts as well.

This is one stock that should be on your radar and a part of your core portfolio at the present time.

No comments:

Post a Comment