February 5, 2025 — The final question on a panel at the American Financial Services Association Vehicle Financing conference in New Orleans on January 21 was directed to Bank of America senior North American Automotive Equity Research Analyst John Murphy. “Any stock tips?” he was asked.
He responded, saying he was all in on the public dealer stocks.
Smart man — you can see from the attached chart, each of the six groups has outperformed the S&P 500, more than doubling it over the last five years.
Yesterday, three of the six groups saw their share prices hit all-time highs. — Asbury Automotive, Group 1, and Sonic Automotive.
(NOTE: their share prices are retreating in early trading this morning).
On Thursday, fueled by a strong 4th quarter earnings report, Asbury’s share price jumped more than $40 a share to more than $312 before closing at just under $306. It’s dropped more than $6 this morning.
After also reporting a strong 4th quarter earlier this week, Group 1 Automotive shares jumped to $471.28 yesterday from a close of $449.45 on Wednesday. The $471 is the highest stock price in history for the six publicly traded new-car dealership groups.
But by market close last night, shares for the Houston-based dealer group had retreated to $461 and is are down another $2 this morning.
Sonic Automotive shares also hit their all-time high yesterday at $75.67. They are down slightly this morning to $75.14. Sonic’s year-end and 4th quarter earnings call is February 12.
Chart guide:
Shaded Blue: Group 1 Automotive
Purple: AutoNation
Yellow: Penske Automotive
Orange: Lithia & Driveway
Blue: Asbury Automotive Group
Green: Sonic Automotive
Magenta: S&P 500
As you can see, a fair amount of volatility in the public dealer group shares, but historically, the rebounds are always higher than the drops (Lithia being the one exception).
Share price isn’t the only metric to measure companies, but if you’re investing, you’re probably happy with the continued strength in the pricing.
