No. of Recommendations: 7
One has to wonder if there is a place that it is really too cheap.
Used car prices weakening? I can ignore that, they're a flow business: profits vary primarily with transaction volume, not car prices.
Weakening economy? Likewise. Americans buy cars through fat times and lean times--when "new" is too expensive for how they're doing, they buy "used".
Bad stock prices? No problem, I can buy on weakness and sell in the strong part of the cycle, rinse and repeat.
But those unit sales declines are not good news at all.
The main consolation is that they're still making money every quarter, so they're not going anywhere. The only other big bad shoe to drop would be if the securitization market closes on them.
Jim
