By Jeff Sanford
Toronto, Ontario — November 14, 2016 — The CRM Index is a group of thirteen publicly-traded stocks related to the collision repair sector. You can find the current constituent stocks here. Check in each Tuesday for updates on what the listed companies are doing. It’s the best way to keep up on the trends and information you need to drive effective decision making.
– Genuine Parts Company is the parent of NAPA. The company sent out a press release yesterday stating the board of directors has declared a dividend of 63.75 cents a share to be paid December 9, 2016. The company’s stock enjoyed a huge one-day bump last week when the company’s stock climbed 3.68 percent to $93.50 on Thursday, November 10. Trading volume of more than 1.3 million shares were far higher than the average daily volume of about 680,000.
Here in Canada, NAPA and Axalta Coating Systems held a ceremony in Montreal honoring the 60-year partnership between the two companies. “We appreciate doing business with our long-time partner Axalta,” Alain Masse, NAPA Canada President, was quoted as saying. “We are excited about this anniversary and foresee only great things to come from this ongoing relationship.
– Sherwin-Williams announced this week it will combine the role of Chief Executive and Board Chairman. Current CEO John Morikis will become Chairman as well at the start of next year. Current Chair Christopher Connor is stepping down. Connor previously served as CEO and Chairman for nearly two decades. A company spokesman said Morikis’ appointment has been planned for some time. Sherwin-Williams is just now working through the massive $9 billion acquisition of paint-maker Valspar, which was announced last March. The companies recently issued a joint response in reaction to “unfounded market rumors” that regulatory approvals for the merger may not be forthcoming. The Federal Trade Commission is expected to rule on the merger by the end of the year.
– PPG Industries announced this week it is picking up the remaining 50 percent ownership stake in Italian coatings producer Univer Italiana S.r.l. Financial terms of the transaction were not divulged. PPG has indicated this acquisition is a key step in efforts to expand in Europe. PPG Industries recently reported a loss when it released Q3 numbers. A one-time, but hefty pension settlement, led to the loss. Overall, the company said it expects a “modest improvement” in global demand and is projecting growth in earnings in Q4. The company currently enjoys a “buy” rating from two brokerage firms and a “strong buy” by nine other brokers.
– A feature article in the London Free Press introduces the new CEO of 3M Canada. Mojdeh Poul emigrated from Iran in the wake of the Iranian revolution. Since then she has risen through the ranks and now takes over the reins at the Canadian 3M headquarters in London, Ontario. There she will lead the 1,800 3M Canada employees (about half of whom work in the London head office and the manufacturing plant in that city). She takes over from outgoing 3M Canada head, Paul Madden, a, “Middlesex County native and Western graduate who has moved on to head 3M’s Global Automotive Division,” according to the Free Press. 3M has also recently completed a major expansion tot its Canadian headquarters.
– Boyd announced its Q3 numbers last week and may break its previous records for acquisitions in a single year. For more on this, please see “Boyd Group on track for a record year in acquisitions.”
The company had an excellent quarter, reporting sales increases of 14.7 percent, same-store sales increases of 4.7 percent and the acquisition of a major MSO in the Cincinnati region. The good news seems to have incited RBC Capital Markets to upgrade its outlook on Boyd units. RBC has increased its price target to $88 a unit. The units were trading slightly under that price Monday afternoon.
Related Market Notes
– Markets are reacting to the election of Donald Trump as President of the United States. Last week there was a huge cycling out of consumer staple stocks such as Proctor & Gamble (which was down 3 percent in one trading session). Traders were moving into higher-returning, but more risky financial stocks, on a bet that Trump will be good for the economy. Articles in the Canadian financial press suggested that Donald Trump’s “hostility toward trade with OPEC oil producers and interest in US energy security could boost demand for Canadian oil …” This would be good news for the hard-hit Calgary economy, which continues to suffer as a result of lower oil prices. Trump has also promised to reopen the approval process for the Keystone XL oil pipeline, which would also benefit Alberta. Other Canadian economists worried that the huge sell-off in the bond market in the wake of Trump’s win could push up the natural interest rate. Some are even talking now about “Trumpflation,” the idea that promised infrastructure spending could push up inflation in North America. The worry is that this could cause US and Canadian central banks to begin raising interest rates sooner than expected. Interesting times to come!
