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]

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
What are the successful IoT innovations from emerging markets? What are the unique challenges and opportunities from these markets? How did the constraints in connectivity among others lead to groundbreaking insights? In her session at @ThingsExpo, Carmen Feliciano, a Principal at AMDG, will answer all these questions and share how you can apply IoT best practices and frameworks from the emerging markets to your own business.
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
Between the mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at @DevOpsSummit at 19th Cloud Expo, Charles Kendrick, CTO at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how business and deve...
SYS-CON Events announced today that SoftNet Solutions 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. SoftNet Solutions specializes in Enterprise Solutions for Hadoop and Big Data. It offers customers the most open, robust, and value-conscious portfolio of solutions, services, and tools for the shortest route to success with Big Data. The unique differentiator is the ability to architect and ...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
Qosmos, the market leader for IP traffic classification and network intelligence technology, has announced that it will launch the Launch L7 Viewer at CloudExpo | @ThingsExpo Silicon Valley, being held November 1 – 3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The L7 Viewer is a traffic analysis tool that provides complete visibility of all network traffic that crosses a virtualized infrastructure, up to Layer 7. It facilitates and accelerates common IT tasks such as VM migra...
A completely new computing platform is on the horizon. They’re called Microservers by some, ARM Servers by others, and sometimes even ARM-based Servers. No matter what you call them, Microservers will have a huge impact on the data center and on server computing in general. Although few people are familiar with Microservers today, their impact will be felt very soon. This is a new category of computing platform that is available today and is predicted to have triple-digit growth rates for some ...
As the world moves toward more DevOps and Microservices, application deployment to the cloud ought to become a lot simpler. The Microservices architecture, which is the basis of many new age distributed systems such as OpenStack, NetFlix and so on, is at the heart of Cloud Foundry - a complete developer-oriented Platform as a Service (PaaS) that is IaaS agnostic and supports vCloud, OpenStack and AWS. Serverless computing is revolutionizing computing. In his session at 19th Cloud Expo, Raghav...
So you think you are a DevOps warrior, huh? Put your money (not really, it’s free) where your metrics are and prove it by taking The Ultimate DevOps Geek Quiz Challenge, sponsored by DevOps Summit. Battle through the set of tough questions created by industry thought leaders to earn your bragging rights and win some cool prizes.
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining sensor...
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here