Senate Vote Exempts Auto Dealers From Extra Regulation (LAD, ABG, CPRT, CRMT, AN, SAH, GPI)

Tickerspy’s Auto Dealer Index

AUTO DEALER INVESTING IDEAS

• Popular long ideas: KMX, CPRT, AN
• Popular short ideas: AN, KMX, KAR
• Top dividend plays: KAR, PAG, LAD
• Pro favorites: CPRT, KMX, KAR

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AUTO DEALER COVERAGE

These companies sell new and used vehicles to consumers

• Retail Sectors Mixed After June Report (SAH, PAG, CRMT, CAB, DKS, KIRK, BBBY, WMT, CVS)
• CarMax Beat Powers Auto Dealers (KMX, XTO, XOM, AN, CPRT, ABG, SAH, PAG, BRK.A, BRK.B)
• Cash for Clunkers Helped Used Car Dealers?

AUTO DEALER CHART

AUTO DEALER METRICS

Avg. Market Cap:	$2.9B
Avg. P/E Ratio:	19.4
Avg. Div Yield:	0.7%

A Senate vote on Monday, which passed 60 to 30, proposes that auto dealers would not fall under the jurisdiction of the new regulatory body for consumer financial protection. More specifically, the loans that auto dealers offer would be exempt from oversight by the new regulatory body.

As a whole, the Auto Dealer Stock Index is up 2% today, with Lithia Motors (LAD) and Asbury Automotive (ABG) both up 3%. Compared to the S&P 500, the Index is up 1% on the day.

According to The New York Times, 52% of auto dealers’ profits in 2008 came from financing and insurance plans they offer on their cars, and dealers made more on these plans than they did on actual car sales in 2008. If the final version of the financial overhaul bill does contain this exemption, it will be good news for auto dealers.

Over the last month, Copart (CPRT), America’s Car-Mart (CRMT), and AutoNation (AN) have outperformed in the auto dealer sector, while Sonic Automotive (SAH) and Group 1 Automotive (GPI) have lagged.

Investors can track the Auto Dealer Stock Index, for performance trends and a suite of other metrics at tickerspy.com.

Tags: ABG, AN, CPRT, CRMT, GPI, LAD, SAH