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Lithia (LAD) Expands Footprint With Fink Automotive Buyout

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Lithia Motors, Inc. (LAD - Free Report) recently announced the acquisition of the Fink Automotive Group. The group is located in Tampa, FL, and is led by company president Scott Fink.

Lithia’s latest buyout includes five locations and seven franchises (Hyundai of New Port Richey, Genesis of New Port Richey, Volkswagen of New Port Richey, Hyundai of Wesley Chapel, Genesis of Wesley Chapel, Mazda of Wesley Chapel, and Chevrolet of Wesley Chapel). Hyundai of New Port Richey has been the largest volume Hyundai dealership in the United States for eight straight years.

The transaction has further strengthened Lithia’s footprint in the Southeast and is anticipated to add $430 million in annualized revenues. It will also increase the auto retailer’s Southeast region revenues to more than $1 billion. Lithia financed the buyout through capital raised in concurrent equity and debt offerings in late 2020.

Lithia had earlier announced a five-year plan to yield $50 billion in revenues and $50 in earnings per share. Since the plan’s roll-out, the retailer has achieved $4 billion in total expected annualized revenues acquired.

Lithia is one of the leading automotive retailers of new and used vehicles, and related services in the United States. It offers tailored services complemented through its nationwide network. The buyout of the Fink Automotive Group is in sync with the auto retailer’s proven success strategy of acquiring strong, high-performing franchises.

Lithia is highly optimistic about the buyout. Tampa is one of the hottest markets, as validated by the success of the Hyundai store in New Port Richey. These franchises would perfectly supplement Lithia’s existing product portfolio. In fact, the buyout aligns with Lithia’s plan to fortify the reach and density of its network to serve customers more conveniently. In addition, Fink Automotive’s unparalleled commitment to providing the highest level of customer service will further enhance Lithia’s offerings.

Lithia currently carries a Zacks Rank #3 (Hold). The company put up a stellar show in the fourth quarter of 2020, delivering earnings of $5.46 per share, up a whopping 85% from the year-ago level. Shares of the company have gain 27.9%, year to date, compared with the industry’s rally of 17.8% during the same period.

Key Picks

Some better-ranked stocks in the auto space include Rush Enterprises (RUSHA - Free Report) , AutoNation Inc. (AN - Free Report) and Penske Automotive Group (PAG - Free Report) . While Rush currently sports a Zacks Rank of 1 (Strong Buy), AutoNation and Penske carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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