Petrus Trust Company has made a notable entry into the automotive aftermarket sector by acquiring 520,000 shares of LKQ Corporation (LKQ) in the fourth quarter, as disclosed in a recent SEC filing. This new position amounts to approximately $15.70 million, representing 1.59% of Petrus Trust’s reportable assets.
This investment comes at a time when LKQ has faced significant challenges, with its stock down about 31% over the past year, contrasting sharply with the S&P 500’s 16% gain. Despite a slight revenue increase to $3.3 billion in the fourth quarter, the company’s profitability has suffered, with net income dropping 50% year-over-year. However, LKQ continues to generate robust cash flow, and management is implementing cost-saving measures projected to yield over $50 million annually.
For investors, this move by Petrus Trust highlights a strategic bet on LKQ’s potential to leverage steady aftermarket demand and pricing power, even as margin pressures loom. For a deeper dive into LKQ’s performance and outlook, I recommend checking out the full article.
Source: fool.com