In the past I have discussed the importance of developing a strategy and the implications consolidation has on your business. A big part of strategy, whether it is stand pat, buy or sell to understand what your competitors are up to. For this reason I am also often asked to present to industry groups about the goings on of other large players in the industry.
Acquisitions, who acquired whom and the price paid for such acquisitions is always a topic of much interest. When acquisitions are completed by a public company, or semi-public company perhaps planning to go public, a lot of information is available in public filings.
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For me, following public companies is an important part of what I do to help my clients run a more profitable and valuable business. Competitive analysis, or keeping track of the goings on of your competitors, is the foundation of building an attractive valuable business. Keeping track of public companies allows me to gain insight into business models, profitability, and consolidation trends. (If you’re looking for a way to do apply these insights directly to your company be sure to check out the Simple Financial Dashboard I developed).
My watchlist
The public companies in the automotive aftermarket that I look at on a regular basis include:
- The Boyd Group (TSE: BYD.UN) Collision Repair
- LKQ Corporation (NASDAQ: LKQ) Parts and Paint Distribution
- Uni-Select Inc (TSE: UNS) Parts and Paint Distribution
- Fenix Auto Parts (NASDAQ: FENX) Parts Distribution
- AMA Group (ASX: AMA) Collision Repair
Following these companies often provide substantial insight into the drivers of profitability. By following Uni-Select I am able to gather insight into the business model at FinishMaster. Based upon the most recent annual report, FinishMaster will continue to seek out acquisitions in the Paint Distribution and Jobber space and has an eye on adjusting their customer mix in order to improve their profitability. My take away: keep an eye out for possible price increases and more consolidation in the jobber industry. Continue reading by clicking here.
