Group 1 Automotive, Inc. (GPI)

Cash for Clunkers is a hit...but for how long. The economy is weak and so is every aspect of the business...Profits ..What profits..Smoke and mirrors on cost cuts. Sector should be down graded.

ps test

Just a terrible revenue trend. A little pricey (PEG 1.5) if you even believe the earnings estimates. Total debt ($1.5B) at 3x market cap. Declining cash balance. yada yada yada.

OVERBOUGHT.

I'll take the long side of this one based on a low valuation and despite the poor economy there is a nice upside to this stock. Maintenance will carry the day until used car sales improve.

As long as people need to service and maintain their cars there will strong earnings. More sophisticated cars and extended warrantees will increase traffic to the dealers.

Good stable company. Well invested in its market. It can be hurt by the price of oil, however with that now dropping again, once we see consumer confidence return they will do well.

Sleeper Stock. Very profitable company. Selling well below its value. Will eventually come to the attention of fund managers. Look for the stock to double within 24 months.

Good mix of P/E,P/S,P/BV. Also a very efficient company!

Positioning itself to be in good future position when automotive retail sector corrects

to increase dividend, Get it before it's announced !

if people aren't buying cars, do they start buying more car parts?

trading at less than 20 percent of sales provides major upside to a small value play

A Value Proposition

The important figures for auto sales are out with total vehicle sales for January down by 4.7% and a dip in daily selling rate by 8.5%. Despite this weakness Group 1 Automotive were able to improve their first-quarter total revenues by 7.4%, thanks to its recent dealership acquisition. However, on a same-store basis revenues declined by 2.3% on account of lower volumes growth in New Orleans market.

Gross margin eroded by 50 bps as a result of 60 bps declines in both new vehicle and parts and service margins. New vehicle margins were impacted by continuing weakness in the company’s domestic stores, with Ford F-Series sales down 25% and lower Chrysler margins reflecting a decrease in manufacturer dealer incentives and rebates realized. Group 1’s margins were also negatively impacted by continued weakness in the California market.

A significant reduction in domestic inventory levels to 69 days’ supply from 99 days supply’ has ensured improvement in New vehicle inventory days’ supply by 6 days to 57 days. As a result of these inventory reductions, weighted average floorplan borrowings declined $28.7 million, partially offsetting a 73 bps increase in the weighted average interest rate.

It is expected that total industry-wide sales of new vehicles throughout 2007 will be lower than 2006 and remain highly competitive. Group 1 has already lowered its 2007 full-year guidance to $3.75-$4.05 per diluted share from $4.00-$4.25. The uncertain automotive retailer industry indicates clear signals to investors to wait before investing in Group 1 Automotive.

They missed earnings estimates by 13%, but still grew earnings for the quarter (YOY). Earnings are going up at the same time that the stock price is going down. The market will realize soon enough that this stock is on sale.

Smart moves being made by management team.

Used cars up.

Simple 52$ now after yr 76.5$+