Group 1's First Quarter Hurt Badly By Weakness in Houston and Oklahoma
We are not changing our moat rating or fair value estimate on Group 1 after the dealer’s first-quarter earnings miss brought the stock closer to our fair value estimate on April 28. Adjusted EPS of $1.53 badly missed consensus of $1.72 while revenue fell 3.4% year over year (down 1.5% excluding currency) to $2.5 billion, a slight miss of consensus of $2.6 billion. Group 1 gets over 40% of its new vehicle unit volume from Texas and Oklahoma and these states suffered badly, especially in Houston. ...Group 1 Automotive is an operator in the automotive retail industry. Through its dealerships, the company sells new and used cars and light trucks, arranges related vehicle financing, sells service and insurance contracts, provides automotive maintenance and repair services, and sells vehicle parts. The company sells retail used vehicles directly to its customers at its dealerships or via its internet sites and wholesale used vehicles at auctions. The company sells replacement parts and provides both warranty and non-warranty maintenance and repair services, as well as provides collision repair services at the collision centers that the company operates. The company also sells parts to wholesale customers.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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