Stock Quickie – BAP:ASX

Bapcor – BAP:ASX

How did we get here?

Feel like I’d heard it mentioned by Roger Montgomery a few times, and thought it was worth a look. One opportunity we found during this crisis Bapcor (Dominic Rose – MGIM)

*/Another car parts company!./*

What do they do?

Australia’s leading provider of aftermarket parts, accessories, equipment and services for the automobile industry. 

The MGIM article does a good job of highlighting the competitive advantages and market status of the business. 

Weighing machine

Return on equity has held at 10-13% and margins have been increasing for the last 5 years, going from 4-7%. Middling debt ratio managed between 50-60%. Their book value is good, with growth coming in line with sales (~20%, half that last FY) with a reasonable dividend yield (>3%). A slight tendency to dilute the share pool from time to time (presumably for acquisitions). Wrap all that up with low insider ownership (0.8%, ~$15M in shares), but enough to have skin in the game. I’d classify this as a “solid company”.

Voting machine

Reasonable popularity, with a PE ratio slightly higher that the market average (~16x). 

Other options

NTD, SFC, IFM

Worth looking further?

Yes. Decently managed company. Some good tailwinds identified by MGIM that I think I agree with. Worth more of an analysis.