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: 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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