Penske Automotive Group (PAG, Financial) (PAG - $104.69 - NYSE) owns and operates new and used car dealerships, as well asleasing and selling commercial trucks. During the second quarter, Penske posted blowout quarterly earnings with sizable beats on the top and bottom lines. Penske has a very balanced business model, and even as margins on the sales of new and used automobiles slightly declined sequentially, other parts of the business — such as parts and distribution and truck sales — helped bolster profits. Also, significant demand for autos with little supply has enabled Penske to continue generating high gross profit per vehicle. With a relatively high exposure to luxury auto brands, Penske may be a little more defensive in a recessionary environment. Finally, the company has shown itself to be an aggressive buyer of its shares, thus providing meaningful support.
From the Keeley Small Cap Dividend Value Fund second-quarter 2022 commentary.
