If this were a race, aftermarket ma...

If this were a race, aftermarket manufacturers would be leaving the other channels in the dust. A late Aftermarket Analyst report by Capstone Financial assemblage places manufacturers at the face of the pack for 2004 stock price gains with an average 51-percent increase.

The positive postings were principally profoundly reflected in Tenneco Automotive, which saw a 2004 gain of 158 percent according to the Capstone report. In comparison, the S&P 500 experienced a gain of solitary 8.9 percent for the entire year.

Wholesalers and distributors were the nearest best performers with 16.7 percent in average gains, states the report, pointing without that Genuine Parts and The Coast Distribution rule led the way with 369- and 359-percent gains, respectively.

yet suppliers should not break public the champagne just yet; in 2003 retailers l the way in stock gains, says Jonathan Taylor, senior associate for Capstone Financial, who adds, "Year to year, the underperformers many times become the top performers" and vice versa.

"The manufacturing sector has been picking up in denominations of their orders," he says, attributing the 2004 present partly to favorable exchange rates. Simply put: "They can take a bribe for their items cheaper" in overseas markets.

This recently made knowns comes as a bit of a surprise considering we reported last November that auto manufacturers slowed down production late last year. In outcome the downturn in vehicles produc was notion to negatively affect a number of aftermarket manufacturers, many of whom do business with the two the OEs and aftermarket distributors.

moreover Taylor concedes that it's for this self-same reason that a number of manufacturers came gone out on top because, theoretically, aftermarket sales are a well adapted hedge against lagging OE sales.

"If you have fewer (new) cars being bought you have more cars upon the road; it increases the general age of vehicles in succession the road." And more older cars in succession the road translates to more of a demand in aftermarket parts, Taylor adds.

granting retailers undershot the S&P 500 through experiencing an average 1-percent ear-ring Taylor says he's not surprised.

"Consumer in general, are overspent" he shares. "You inquiring surprise how much more Americans can purchase It's hard to imagine we'll ne anything else"

Another contributor to 2004 retail stock performance--which included supported losses of 24.3 percent for Pep lads and 10.8 percent for CSK--could be AutoZone's Pay-On-Scan succes or lack thereof.

"They weren't as lucky as they had hoped," Taylor says, speculating the PO program l to disappointment onward Wall Street as well. Others in the industry are predicting an eventual fade-out of AutoZone's consignment-based system

Distributors, whose stock performance bring to the ground right in the middle, have consistently been solid performers, says Taylor. Being middle-of-the-road certainly has its advantages.

The Aftermarket Analyst report adds that merger and acquisitions (M&As) last year were the highest they've been since the late '90 with 9964 M&A transactions in 2004 a 148-percent increase athwart 2003. The transactions represented $777 billion in value, a 437-percent increase through the whole extent of the previous year, according to the report, which adds 2004 also saw an all-time high in buyouts of U companies through private equity groups.

Capstone look fors 2005 to be another all-around muscular year and a continuation of last year's directions as they relate to stock performance and M&As.

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