On Thusday, Goodman Financial Corp disclosed in an SEC filing that it sold out of LKQ (LKQ 1.89%), exiting 355,108 shares in a transaction estimated at $10.85 million based on quarterly average pricing.
What Happened
According to an SEC filing releaesd Thursday, Goodman Financial Corp sold its entire holding of 355,108 shares in LKQ (LKQ 1.89%). The estimated value of the trade was approximately $10.85 million.
What Else to Know
Top holdings after the filing:
- NYSEMKT: SPDW: $36.34 million (6.9% of AUM)
- NASDAQ: VCSH: $31.52 million (6.0% of AUM)
- NASDAQ: NXT: $28.75 million (5.4% of AUM)
- NASDAQ: VMBS: $23.61 million (4.5% of AUM)
- NYSE: SCHW: $19.80 million (3.7% of AUM)
As of Friday, LKQ shares were priced at $33.19, down 8% over the past year and well underperforming the S&P 500, which is instead up about 17% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $14.10 billion |
| Net Income (TTM) | $697.00 million |
| Dividend Yield | 3.6% |
| Price (as of Monday) | $33.19 |
Company Snapshot
- LKQ Corporation offers a broad range of replacement parts, components, and systems for vehicle repair and maintenance, including body panels, mechanical parts, glass, and specialty products for recreational vehicles.
- The company generates revenue by distributing both new and recycled automotive parts through operations in North America and Europe.
- It serves collision and mechanical repair shops, new and used car dealerships, and retail customers in the automotive aftermarket sector.
LKQ Corporation distributes new and recycled automotive parts across North America and Europe, serving repair shops and dealerships. LKQ is a leading distributor of automotive replacement parts, operating at scale across North America and Europe. Through its diversified portfolio and extensive distribution network, the company addresses the needs of repair professionals and dealerships seeking cost-effective, high-quality alternatives to original equipment parts. LKQ's strategy emphasizes operational efficiency and broad product coverage, positioning it as a key supplier in the global automotive aftermarket.
What this transaction means for investors
What makes this move worth focusing on is not the sale itself, but the timing. Exiting an underperforming cyclical name while the broader market pushes higher suggests a reassessment of opportunity cost rather than a sudden loss of faith in the business model. For long-term investors, that distinction matters.
With LKQ underperforming over the past year while the broader market pushed higher, Goodman is seemingly reassessing its opportunity cost as the company’s fundamentals remain solid, but uneven. In the third quarter, revenue rose 1.3% to $3.5 billion, but adjusted EPS slipped to $0.84 from $0.86 a year earlier. Meanwhile, management raised the midpoint of its full-year adjusted EPS outlook to $3.00 to $3.15 following the sale of its Self Service segment, and free cash flow hit $387 million for the quarter.
The overall portfolio leans heavily toward broad equity and fixed-income ETFs, with sizable positions in global stocks, short-duration bonds, and a nearly $20 million stake in Charles Schwab. That mix suggests a preference for liquidity, diversification, and balance over single-name cyclicals, particularly if those cyclicals are underperforming.
Glossary
Exited its position: When an investor sells all holdings of a particular security, fully closing out that investment.
Quarterly average pricing: The average price of a security over a specific quarter, used to estimate transaction values.
13F reportable assets under management (AUM): The total market value of securities that an institutional investment manager must report quarterly to the SEC on Form 13F.
Valuation shift: Change in the reported value of an investment, reflecting price movements or asset sales.
Dividend yield: The annual dividend payment divided by the stock's current price, expressed as a percentage.
Aftermarket sector: The industry providing parts, services, and accessories for vehicles after initial sale by the manufacturer.
Operational efficiency: The ability of a company to deliver products or services using the least amount of resources necessary.
Distribution network: The system of warehouses, transportation, and logistics used to deliver products from suppliers to customers.
Original equipment parts: Components made by the original manufacturer for a specific vehicle, as opposed to aftermarket alternatives.
TTM: The 12-month period ending with the most recent quarterly report.
