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What: Dorman Products
So what: Prior to today's drop, the company's stock was trading near its 52-week high, and it had more than doubled since the beginning of the year. Dorman has benefited from consumer thrift during the recession. As consumers drove cars longer to avoid a costly new car purchase, more repairs were required, boosting the need for replacement parts. Investors may see October's strong new auto sales numbers as a sign that Dorman is now on the wrong side of the economic trend curve.
Now what: The company delivered strong Q3 earnings, so today's performance could just be a bump in the road, especially if new auto sales show any signs of future sluggishness, or if consumer thrift is more lasting than expected.
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Fool contributor April Taylor does not own shares of the companies mentioned. 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 Motley Fool has a disclosure policy.