Group 1 Automotive Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of auto retailer Group 1 Automotive (NYSE: GPI  ) jumped more than 11% in intraday trading today as investors cheered the company's third-quarter earnings report.

So what: Recession-strapped consumers don't buy big-ticket items like cars, right? Well apparently they're out buying used cars in droves, because a 34% surge in used car sales gave a major boost to Group 1's results. Not to be totally outdone, new vehicle sales were up 13%, which is particularly impressive since this time last year sales were getting a boost from "Cash for Clunkers." Overall, the company saw a 10% advance in operating income and earnings per share of $0.83 beat analysts' $0.75 expectation.

Now what: If Ford's (NYSE: F  ) continued strong results say anything about the auto market right now, Group 1 may be in line for more smile-inducing results in the quarters to come. While it's a business that may be a little hard to get overly excited about, the stock's valuation looks pretty reasonable right now, particularly if it continues its postrecession bottom-line bounce.

Interested in more info on Group 1 Automotive? Add it to your watchlist here by clicking here.

Ford Motor is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1345325, ~/Articles/ArticleHandler.aspx, 9/21/2014 2:26:52 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement