As consumer prices increase in May at a pace not seen since 2008, five vehicles and parts companies as of Thursday with high financial strength and profitability are America’s Car-Mart Inc. (CRMT, Financial), Fox Factory Holding Corp. (FOXF, Financial), Marine Products Corp. (MPX, Financial), Standard Motor Products Inc. (SMP, Financial) and XPEL Inc. (XPEL, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
The U.S. Bureau of Labor Statistics reported that the consumer price index increased 0.6% in May on a seasonally adjusted basis following a 0.8% increase in April. Over the past 12 months, the index surged 5% before seasonal adjustment, up from the Dow Jones consensus estimate of a 4.7% increase and the largest 12-month increase since the 5.4% gain during the period ending August 2008.
The Labor Department further said that the index for used cars and trucks soared 7.3% in May, representing approximately one-third of the all items increase. Over the past 12 months, the used cars and trucks index accelerated 29.70% while the new vehicles index climbed 3.3%, its highest increase since November 2011.
As such, investors may find opportunities in high-quality vehicles and parts companies. GuruFocus’ All-in-One Screener listed five companies that have a financial strength rank of at least 6, a profitability rank of at least 7, a business predictability rank of at least three stars and five-year average operating margin growth of at least 1%.
America’s Car-Mart
America’s Car-Mart (CRMT, Financial) sells used cars and provides financing for customers. GuruFocus ranks the Rogers, Arkansas-based company’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank, a return on assets that outperforms over 90% of global competitors and an operating margin that has increased approximately 9.4% per year on average over the past five years.
Chuck Royce (Trades, Portfolio)’s Royce Investment Partners has a holding in America’s Car-Mart.
Fox Factory Holding
Fox Factory Holding (FOXF, Financial) designs, manufactures and markets performance-defining products and systems primarily used on bikes and other types of vehicles. GuruFocus ranks the Braselton, Georgia-based company’s profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and an operating margin that has increased approximately 3.10% per year on average over the past five years and outperforms more than 90% of global competitors.
Gurus with holdings in Fox Factory Holding include Ron Baron (Trades, Portfolio)’s Baron Funds and Pioneer Investments (Trades, Portfolio).
Marine Products
Marine Products (MPX, Financial) manufactures, distributes and markets fiberglass motorized boats through its independent dealer network. GuruFocus ranks the Atlanta-based company’s financial strength 9 out of 10 on several positive investing signs, which include no long-term debt and a double-digit Altman Z-score.
Marine Products’ profitability ranks 8 out of 10 on the back of operating margins increasing approximately 2.3% per year on average over the past five years and outperforming more than 80% of global competitors.
Standard Motor Products
Standard Motor Products (SMP, Financial) manufactures and distributes replacement parts for motor vehicles, focusing on engine management and temperature control. GuruFocus ranks the Long Island City, New York-based company’s profitability 8 out of 10 on several positive investing signs, which include a perfect Piotroski F-score of 9, a 4.5-star business predictability rank and an operating margin that has increased approximately 1.9% per year on average over the past five years and outperforms more than 80% of global competitors.
XPEL
XPEL (XPEL, Financial) provides a wide range of automotive paint protection films and automotive window films. GuruFocus ranks the San Antonio, Texas-based company’s profitability 10 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased more than 10% per year on average over the past five years and is outperforming over 90% of global competitors.
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