LKQ Corp (LKQX)

jlesliel (< 20) Submitted: 5/1/2008 11:07:39 PM : Start Price: $22.91 LKQX Score: -0.52

First, a little about me. I was brought up in the auto repair business. My Grandfather, Father, myself, and my Uncle were auto repair mechanics. In 1987 after working for my dad and dealerships as a mechanic, tired of being greasy and sweaty, endlessly spending money on tools, I turned to being a partsman. I now work for a dealership with one of the the nation's largest collision centers and deal with LKQ on a daily basis. With over a million dollars in inventory at my dealership, I prefer to sell my own parts but, because of price, I have to call LKQ.

In all my life, I have never known an auto recycler with any business sense that didn’t live a prosperous life. The used auto parts market is HUGE and always has been. Auto recyclers buy totaled, wrecked cars from insurance companies for pennies on the dollar. They then dismantle these cars and sell the parts for huge profits. Right now with economy the way it is, insurance companies are seeking less expensive ways to repair their customer's cars involved in accidents. For instance, a car is brought to our shop after an accident. The insurance company writes an estimate. They compare the cost of a new part to the cost of a part to that to a part from a company such as LKQ. The part from LKQ is always less expensive and I have to buy the part from them. Auto owners and mechanical repair shops are also seeking less expensive ways to repair cars when mechanical repairs are needed such as engines, transmissions, axles, rims, trim, radios, almost everything you can think of can be sold from these salvage vehicles. After all usable parts have been sold, the rest can be recycled, like steel, platinum, etc...(all U.S. cars have all types of metals such as catalytic converters that contain platinum). Have you ever thought of how much copper wire is in an automobile?

In LKQ's description on MSN it reads LKQ is a provider of "light" vehicle parts. That does not mean "small" cars such as the the Mini Cooper. "Light vehicle" refers to all cars, trucks, and SUV's. However, LKQ is now venturing into the "heavy" market which is semi trucks that carry all of America's needs.
As far as new cars that are being designed to be more fuel efficient coming out now and in the future, there will always be wrecked/totaled vechicles no matter how old or how new the car is.

This company has approximately 300 locations across the US and Canada. Therefore, if they don’t have a particular part you need, it can be transferred from another location to you. If that is not available, they have also acquired aftermarket parts company Keystone, which is a preffered company by most insurance companies that can supply parts you need. All in one phone call.

I play LKQX both long and short but truly believe LKQX is a good investment and will be around for a long time. Analysts always seem to talk BWA and TRW when it comes to automotive stocks but I believe they need to take a harder look at LKQX as I believe is far more worth looking at.

If you would like to email me with questions, please do.