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4-Star Stocks Poised to Pop: LKQ

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, vehicle replacement parts distributor LKQ (Nasdaq: LKQ  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at LKQ's business and see what CAPS investors are saying about the stock right now.

LKQ facts

Headquarters (founded) Chicago (1998)
Market Cap $5.5 billion
Industry Auto parts wholesale
Trailing-12-Month Revenue $3.8 billion
Management CEO Robert Wagman (since January 2012)
CFO John Quinn (since November 2009)
Return on Equity (average, past 3 years) 13.6%
Cash/Debt $59.4 million / $1.0 billion
Competitors Fastenal
Genuine Parts Company
O'Reilly Automotive

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 388 members who have rated LKQ believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, Jkspotr62, succinctly summed up the bull case for our community:

LKQ has shown strong consistent growth for a number of years. Additionally, the company has been an industry leader and continues to own the market in the after-market auto part sector. LKQ has great management and should be able to maintain stability through depressed markets. LKQ is definitely a company for the long haul.

If you want market-beating returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, LKQ may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of LKQ. 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. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (5)

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.

  • Report this Comment On August 09, 2012, at 7:17 PM, pricedright wrote:

    LKQs recent growth has been a product more from acquisitions than from organic growth. These acquisitions have led to a significant reduction in cash and an increase in debt, which would seem to set a practical limit on continuing major growth through future acquisitions.

    Does anyone else share this concern, given that LKQs current P/E seems to assume continuing growth beyond its organic growth rate?

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LKQ CAPS Rating: ****