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If You Invested $1000 in AutoNation 10 Years Ago, This Is How Much You'd Have Now
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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in AutoNation (AN - Free Report) ten years ago? It may not have been easy to hold on to AN for all that time, but if you did, how much would your investment be worth today?
AutoNation's Business In-Depth
With that in mind, let's take a look at AutoNation's main business drivers.
Incorporated in Delaware in 1991, AutoNation, Inc. is the largest automotive retailer in the United States. The company offers vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products, and other aftermarket products. In addition, it arranges financing for vehicle purchases through third-party sources.
As of Dec 31, 2020, AutoNation owned and operated over 315 new vehicle franchises from 230 stores located in the United States. As of 2020 end, the company owned 74 AutoNation-branded collision centers, 5 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, and 3 parts distribution centers.
The core brands of new vehicles that the firm sells accounted for around 89% of the new vehicles that AutoNation sold in 2020. The core brands offered by the company are — Toyota, Ford, Honda, General Motors, FCA US, Mercedes-Benz, Nissan, BMW and Volkswagen.
AutoNation’s business is divided into three operating segments — Domestic (accounted for about 31.8% of the company’s revenues in 2021), Import (31.2%) and Premium Luxury (37%).
The Domestic segment includes stores that sell vehicles manufactured by General Motors, Ford and Fiat Chrysler; whereas the Import segment comprises stores that sell vehicles manufactured by Toyota, Honda, Nissan, Hyundai and others.
The Premium Luxury segment includes stores that sell vehicles manufactured by Daimler (Mercedes Benz division), BMW, Toyota (Lexus division), Audi and others. Its diversified set of automotive retail franchises supports the automotive retailer’s business, which is sensitive to macroeconomic conditions.
In 2021, new vehicle sales generated 46.7% of revenues, used vehicle sales accounted for 33.5%, parts and services (also referred as “customer care”) added 14.4%, finance & insurance (also referred to as “customer financial services”) constituted 5.3%, and other revenues accounted for 0.1%. In terms of gross profit, the largest contributor was parts and services with 33.8%, followed by finance & insurance with 28%, new vehicle with 24.3%, and used-vehicle with 13.9%.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For AutoNation, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in March 2012 would be worth $3,409.61, or a 240.96% gain, as of March 21, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 217.85% and the price of gold increased 11.92% over the same time frame in comparison.
Analysts are forecasting more upside for AN too.
AutoNation posted the seventh consecutive all-time record numbers in the fourth-quarter 2021. Diversified product mix, strong footprint, large dealer network and aggressive store expansion efforts are set to fuel the firm's profitability. Acquisition of Peacock Automotive Group and Priority 1 have buoyed AutoNation’s portfolio. Enhanced digital solutions have helped AutoNation to further boost profitability and market presence. With the launch of its digital platform AutoNation Express — which enables customers to buy and sell vehicles online — the company has stepped up its digitization game, which is driving its top-line growth. Increased focus on cost discipline is also aiding margins. Strong liquidity profile and investor friendly moves instill optimism. Thus, the stock warrants a bullish stance for the time being.
Shares have gained 7.85% over the past four weeks and there have been 6 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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If You Invested $1000 in AutoNation 10 Years Ago, This Is How Much You'd Have Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in AutoNation (AN - Free Report) ten years ago? It may not have been easy to hold on to AN for all that time, but if you did, how much would your investment be worth today?
AutoNation's Business In-Depth
With that in mind, let's take a look at AutoNation's main business drivers.
Incorporated in Delaware in 1991, AutoNation, Inc. is the largest automotive retailer in the United States. The company offers vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products, and other aftermarket products. In addition, it arranges financing for vehicle purchases through third-party sources.
As of Dec 31, 2020, AutoNation owned and operated over 315 new vehicle franchises from 230 stores located in the United States. As of 2020 end, the company owned 74 AutoNation-branded collision centers, 5 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, and 3 parts distribution centers.
The core brands of new vehicles that the firm sells accounted for around 89% of the new vehicles that AutoNation sold in 2020. The core brands offered by the company are — Toyota, Ford, Honda, General Motors, FCA US, Mercedes-Benz, Nissan, BMW and Volkswagen.
AutoNation’s business is divided into three operating segments — Domestic (accounted for about 31.8% of the company’s revenues in 2021), Import (31.2%) and Premium Luxury (37%).
The Domestic segment includes stores that sell vehicles manufactured by General Motors, Ford and Fiat Chrysler; whereas the Import segment comprises stores that sell vehicles manufactured by Toyota, Honda, Nissan, Hyundai and others.
The Premium Luxury segment includes stores that sell vehicles manufactured by Daimler (Mercedes Benz division), BMW, Toyota (Lexus division), Audi and others. Its diversified set of automotive retail franchises supports the automotive retailer’s business, which is sensitive to macroeconomic conditions.
In 2021, new vehicle sales generated 46.7% of revenues, used vehicle sales accounted for 33.5%, parts and services (also referred as “customer care”) added 14.4%, finance & insurance (also referred to as “customer financial services”) constituted 5.3%, and other revenues accounted for 0.1%. In terms of gross profit, the largest contributor was parts and services with 33.8%, followed by finance & insurance with 28%, new vehicle with 24.3%, and used-vehicle with 13.9%.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For AutoNation, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in March 2012 would be worth $3,409.61, or a 240.96% gain, as of March 21, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 217.85% and the price of gold increased 11.92% over the same time frame in comparison.
Analysts are forecasting more upside for AN too.
AutoNation posted the seventh consecutive all-time record numbers in the fourth-quarter 2021. Diversified product mix, strong footprint, large dealer network and aggressive store expansion efforts are set to fuel the firm's profitability. Acquisition of Peacock Automotive Group and Priority 1 have buoyed AutoNation’s portfolio. Enhanced digital solutions have helped AutoNation to further boost profitability and market presence. With the launch of its digital platform AutoNation Express — which enables customers to buy and sell vehicles online — the company has stepped up its digitization game, which is driving its top-line growth. Increased focus on cost discipline is also aiding margins. Strong liquidity profile and investor friendly moves instill optimism. Thus, the stock warrants a bullish stance for the time being.
Shares have gained 7.85% over the past four weeks and there have been 6 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.