Current Vehicle Cycle at a Sweet Spot for LKQ Corporation (LKQ)

June 29, 2015

Stifel, Nicolaus & Co. Analyst James Albertine says his current top stock recommendation is LKQ Corporation (LKQ). He says LKQ is the largest player – the 800-pound gorilla – in the collision and mechanical aftermarket parts distribution industry.

“When a vehicle comes off warranty, the propensity to use alternative parts — be it recycled, remanufactured or refurbished parts — rises substantially,” he says.

FOR MORE INFORMATION ON THIS INTERVIEW CLICK HERE.

Based on where in the cycle of the space SAAR recovery is, Albertine expects to see growth in three- and four-year old vehicles at the beginning of next year. He says that should support the LKQ story for the next four to five years.

LKQ’s ‘sweet spot’ is between three- to eight-year-old vehicles,” Albertine says. “So where we are in the cycle really determines our call on LKQ.”