Welcome!

News Feed Item

Zacks Investment Ideas feature highlights: Douglas Dynamics, Dorman Products and Motorcar Parts of America

CHICAGO, March 21, 2014 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: Douglas Dynamics (NYSE:PLOW-Free Report), Dorman Products (Nasdaq:DORM-Free Report) and Motorcar Parts of America (Nasdaq:MPAA-Free Report).

Zacks Investment Research, Inc., www.zacks.com.

3 Auto Parts Stocks for a High-Performance Portfolio

Every year right about this time I get the itch. For most people that live in the Midwest it's the itch to get outside and runaround. It's the urge to shake off that cabin fever that has plagued you for the last four or five months. Maybe that's why Chicago goes nuts and dyes the river green on St. Patty's Day. We've been locked up for so long we just have to get out there and do something crazy. (That river's green most of the year anyway.)

I've got a different brand of crazy. This time of year I open up the pocketbook, and usually the savings account, and spend money on new summer tires, refilling the nitrous bottle, new stereo equipment, basically anything that will upset my girlfriend. As I thumbed through the racing parts catalogue earlier this week it got me thinking. Maybe I'm not the only one who is cracking open these pages looking for parts.

This winter was by any measure one of the worst in recent history. I took a peak at the average snowfall map and laughed. Chicago is supposed to get between 24 and 36 inches of snow on average. Guess where we are as of last week? 79 inches. It is the 3rd highest total snowfall on record.

Even though my car doesn't see the snow, the SUVs and pickups with plows attached sure got a whole lot of work this winter. There must be some publicly traded company that sells parts for trucks that plow and I'm sure they are having a great earnings season. What I found was the Captain Obvious of all stock tickers. Take a guess. You got it, (NYSE:PLOW-Free Report), the ticker for the company Douglas Dynamics.

Year over year 4Q saw a 159% increase in sales, mostly attributable to the increase in snowfall early in the season. After living through what happened in 1Q 2014 I would bet that this quarter sees some impressive numbers as well. And while getting a new plow may not be as exciting as a new set of Mickey Thompson 305 Drag Radials, it is good for Douglas Dynamics.

PLOW is a Zacks Rank #1 (Strong Buy) with two analysts raising current year forecasts based on the strong snowy season. Consensus for the year has risen from 79 cents to 95 cents per share.  Last quarter's earnings surprise of 52% is another big reason for the rank.

PLOW just made a huge run from near $14 through previous resistance at $17, approaching $18.50 before finally beginning to pull back. This increased volatility since July of last year was previously unheard of for Douglas Dynamics. A slow, steady uptrend saw appreciation from $13 to $17 without any real scary pull backs at all. The dip down below the 25 day moving average shifted by 5 days (25x5 SMA) in January lasted less than a month. Currently the stock is still in the middle of an intermediate term uptrend, with the 25x5 below the price and in an upward slope. The extreme overbought stochastics are begging for a further sell off to support. Given the fact that $17 was a level of resistance previously, look for that to be support for PLOW should the stock get back down to that level.

Things have been good across the board for the industry. Right now the AUTO/TRUCK-REPLACEMENT PARTS industry is number one in our Zacks Industry Rank. So perhaps snow plows aren't the only parts getting replaced this winter. Being the gear head that I am, I find myself following the automakers often. One stat that stands out is that the average age of cars on the road today. It's now over 10 years. Eventually this pent up demand from the Great Recession has to find its way out, but until then people would rather fix their old cars than buy new ones. If you're fixing old cars, you need parts. A major supplier of parts to Advance Auto Parts and AutoZone isDorman Products (Nasdaq:DORM-Free Report).

Dorman carries a Zacks Rank #2 (Buy) after three analysts raised current year estimates in the last 30 days. The Dorman story has been slow, steady, consistent earnings growth over the years. A quick look at the price and consensus chart shows the solid growth numbers.

From a technical standpoint, DORM is in a similar position to PLOW. However, DORM is a slower and steady story. A failed sustained breakout of $50 saw the stock price retreat down below $47 before finding enough strength to kick off a rally to a new high at $56. Then there was another small seesaw down below $50 and back up through $56 to new highs at $60. What this stock's history tells me is that support and resistance levels are not firm and are relatively wide zones. It has a cyclical nature and doesn't adhere to strict trend lines but overall has a nice, fluttery, upwards motion. I wouldn't be surprised given the stochastic sell signal from overbought territory earlier this month, if the stock comes back down to test as low as $54 before heading higher.

Rounding out my top picks in this leading industry is Zacks Rank #1 (Strong Buy) Motorcar Parts of America (Nasdaq:MPAA-Free Report). MPAA specializes in manufacturing alternators and starters for both domestic and imported autos. Earnings estimates have been rising since last summer, helping the stock turnover from a disappointing 2012. This year earnings are expected to come in at $1.37 compared to an 85 cent loss per share last year. The growth has been so good recently that MPAA has surprised to the upside by no less than 33% over the last 3 quarters. Hopefully the trend continues and we see another beat this quarter.

The technical picture for MPAA is the best of the bunch. A steady uptrend, finding strength at the 25x5 each time, almost perfectly aligned with a stochastic buy signal from oversold territory every time. The most recent retest of the uptrend has taken place in the last few days, with the stock dipping just below $23 before beginning this latest run. Right now you have the stock trading just above the 25x5 and just below resistance at $27. This trading set up looks great right now and a tight stop could easily be placed just below $24 with a target at $30, close to 20% above where we sit now for a very attractive risk versus reward.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.

Get the full Report on PLOW – FREE

Get the full Report on DORM – FREE

Get the full Report on MPAA – FREE

Follow us on Twitter:  http://twitter.com/ZacksResearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
While DevOps promises a better and tighter integration among an organization’s development and operation teams and transforms an application life cycle into a continual deployment, Chef and Azure together provides a speedy, cost-effective and highly scalable vehicle for realizing the business values of this transformation. In his session at @DevOpsSummit at 19th Cloud Expo, Yung Chou, a Technology Evangelist at Microsoft, will present a unique opportunity to witness how Chef and Azure work tog...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.