Featured Content



Still worried about the economy? Become an elite charter member of George's DAILY PROFITS and you could... TRIPLE YOUR MONEY IN A MONTH! George gave us the $2.8-billion IT infrastructure provider, up 4,745.20%; the $1.8-billion advertising agency, up 1,295.44%; and the $762 million business software company, up 1,213.19%. Only charter members can follow George daily. Learn how here!

Old Economy Auto Parts Stock a Better Play Than Any Tech Stock?


Old Economy Auto Parts StockTomorrow a real successful company reports its earnings results, and its track record on the stock market is impressive. LKQ Corporation (NASDAQ/LKQ) is in the auto parts business, selling replacement parts and components for vehicles and heavy trucks. It’s one of those old economy businesses that have been making a lot of money for shareholders.

It’s somewhat counterintuitive, but like so many old economy businesses we’ve been looking at, business is better for LKQ in the auto parts sector than it is in a lot of other industries, even technology. On the stock market, LKQ has become a 10-bagger over the last 10 years. The company’s stock chart is below:

LKQ LKQ Corp. Nasdaq stock market chart

Chart courtesy of www.StockCharts.com

In its third quarter of 2012, LKQ’s revenues grew 30% to $1.1 billion, of which 5.6% was organic and the rest was due to acquisitions. Even with those acquisitions, the company’s earnings grew 10% to $54.0 million, while diluted earnings per share grew 5.9%.

The company recently acquired four salvage yards and a scrap recycling business. During the third quarter, LKQ opened 10 new Euro Car Parts branches, bringing its total branch count in the United Kingdom to 120.

It will be very interesting to see if LKQ can beat the Street with its earnings results. The company’s top-line growth may be even more important. On the stock market, LKQ effected three two-for-one stock splits over the last seven years, and the company has a history of beating earnings-per-share guidance.

Countless old economy businesses are reporting good financial growth and are doing great on the stock market. Much better, in fact, than what we all think are the typical faster-growing industries.

In these pages, we have looked at A. O. Smith Corporation (NYSE/AOS), another old economy business that sells water heaters and boilers. (See “The Old Economy’s Back…and It’s Making Great Money.”) The company’s latest earnings beat Wall Street estimates, and the company has been soaring on the stock market. A one-year stock chart of A. O. Smith is below:

AOS Smith AO corp stock market chart

Chart courtesy of www.StockCharts.com

The stock market is definitely fatigued, but the earnings results from so many old economy businesses suggest that the industrial economy is holding up well. This doesn’t mean that there is a lot of new hiring going on; only that earnings are holding up with relatively solid revenue growth.

The stock market is rewarding those companies providing real economic growth, because it’s so hard to come by these days. While it used to, the stock market no longer cares where this growth comes from, and this is why so many old economy stocks are performing well.

I think a lot of these industrial businesses will keep doing well financially and on the stock market this year. Speculators can play this momentum, because there is so little of it left in capital markets.

Investors look to the stock market for growth, but many avoid boring old economy businesses to their detriment. Especially now in the age of austerity, finding good businesses that are consistently growing their revenues and earnings is much more difficult. LKQ is a 10-bagger on the stock market and should report solid fourth-quarter earnings results. If the company continues to report good numbers, it will be a much better play over any technology stock this year. Even if it doesn’t, this business still has a lot of momentum.

Premium Content

Secret "New Swiss Bank Account" Safest Way to 44% Returns


It's the safest—but, until now, completely ignored—place for your money. Because these elite "bank accounts" pay guaranteed 5% cash payments per annum on top of returns on capital exceeding 44%... Learn all about them here.

About the Author, Browse Mitchell Clark's Articles

Mitchell Clark is a senior editor at Lombardi Financial, specializing in large- and micro-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, including Micro-Cap Reporter, Income for Life, Biotech Breakthrough Stock Report, and 100% Letter. Mitchell has been with Lombardi Financial for 17 years. He won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was a stockbroker for a large investment bank. In the... Read Full Bio »

Exclusive profit Confidential Presentation

Secret Retirement Plan Pays Up to $12,160 a Month?

Secret Retirement Plan Pays Up to $12,160 a Month?

A select group of Americans are retiring with a little-known retirement plan whose advertisement by its issuers is censored by Congress... Yet this plan enables Americans to potentially collect up to $12,160 in monthly income that's sponsored entirely by large-cap American companies. These secret Sponsored Retirement Plans are trumping social security by up to 10 times. And unlike mainstream retirement plans like 401(k)s or IRAs, SRPs are ideal for people who want to start with very little money. You could begin your SRP with as little as $10, $50, $100 or $400. To see real-life stories of folks who've built hundred-thousand-dollar portfolios thanks to SRPs and how to get your own plan started today, click here now!