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Group 1 Acquires Two Honda Dealerships in Texas & Louisiana

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Group 1 Automotive, Inc. (GPI - Free Report) has announced the acquisition of two Honda dealerships in Louisiana and Texas. The dealership acquired in Slidell, LA, is a Honda of Slidell store and the other in San Antonio, TX, is a Fernandez Honda store. Counting these two acquisitions, the company currently owns 13 Honda dealerships across Florida, Louisiana, Mississippi, New Jersey, Oklahoma, Texas in the United States and Sao Paulo in Brazil.

Per management, expanding Group 1’s partnership with Honda will facilitate it to strengthen Group 1’s position in two of the existing markets that have the potential for further growth.

Earlier, in April 2018, the company acquired Toyota Alpha Trevo Automóveis Ltda in Sao Paulo, Brazil. The store will operate as T-Drive Toyota Alphaville, aiding Group 1 to tap the growing market. The acquisition is anticipated to generate roughly $45 million in annualized revenues. As of July 26, the company had acquired 12 franchises, which are expected to contribute $405 million in annual revenues.

Group 1 Automotive, Inc. Price and Consensus

 

Additionally, Group 1 repurchased 189,600 shares for $13.2 million since Jul 26, 2018. From the beginning of 2018 to date, it has repurchased 1.3 million shares for $89.5 million, which represents 6.4% of the company’s share count at the start of 2018. Further, as of Aug 6, 2018, the company had $60.2 million remaining under the share repurchase authorization.

Price Performance

In the past three months, Group 1’s stock has gained 14.1%, outperforming 4.5% increase recorded by the industry it belongs to.

 

Zacks Rank & Key Picks

Group 1 currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Honda Motor Company (HMC - Free Report) , Spartan Motors, Inc. and CarGurus, Inc. (CARG - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Honda has an expected long-term growth rate of 3%. Over a year, shares of the company have gained 10.3%.

Spartan Motors has an expected long-term growth rate of 15%. Shares of the company have risen 67.2% in the past year.

CarGurus has an expected long-term growth rate of 5%. Over a year, shares of the company have gained 65.3%.

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