QUOTE AND NEWS
TheStreet.com  Oct 10  Comment 
NEW YORK (TheStreet) -- Shares of Genuine Parts Co. closed up 0.68% to $87.11 after the company was upgraded to "overweight" from "neutral" at J.P. Morgan. The firm said the replacement parts company is seeing strong end-market demand. J.P....
SeekingAlpha  Oct 8  Comment 
By Dividends4Life: Linked here is a detailed quantitative analysis of Genuine Parts Company (NYSE:GPC). Below are some highlights from the above-linked analysis: Company Description: Genuine Parts Co. is a leading wholesale distributor of...
Market Intelligence Center  Oct 3  Comment 
For a hedged play on Genuine Parts Co (GPC) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Feb. '15 $85.00 covered call for a net debit in the $83.09 area. That is also the break-even stock price for the covered...
SeekingAlpha  Oct 2  Comment 
By Sure Dividend: In part 10 of the 54-part Dividend Aristocrats In Focus series, we will look into automotive parts manufacturer Genuine Parts Company (NYSE:GPC), better known to consumers as the owner of NAPA auto parts. Business...
Market Intelligence Center  Sep 30  Comment 
For a hedged play on Genuine Parts Co (GPC) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Nov. '14 $90.00 covered call for a net debit in the $86.77 area. That is also the break-even stock price for the covered...
SeekingAlpha  Sep 20  Comment 
By David Schauber, Jr.: There are many different reasons why someone would invest in the stock of a publicly-traded company. These reasons include the potential for strong earnings growth, a strong balance sheet, the potential for capital...
SeekingAlpha  Sep 15  Comment 
By Winning Strategies: Genuine Parts Company (NYSE:GPC) is one of the great growth stories in the specialty retail industry. The company has been doing very attractive business of distributing industrial replacement parts, automotive replacement...
StreetInsider.com  Sep 12  Comment 
UPGRADES Cowen upgrades Sprint (NYSE: S) from Market Perform to Outperform with a price target of $8. Click Here for more color. Barclays raises Netflix (Nasdaq: NFLX) from Underweight to Equalweight and moves its price target from $420 up to...
TheStreet.com  Aug 28  Comment 
NEW YORK (TheStreet) -- Shares of Genuine Parts Co.a are lower by -0.92% to $86.99 in early market trading after the company's rating was cut to "neutral" from "buy" ataSunTrust Robinson Humphrey this morning. Analysts at the firm lowered...
Benzinga  Aug 28  Comment 
Analysts at SunTrust Robinson Humphrey downgraded Genuine Parts Company (NYSE: GPC) from Buy to Neutral. The target price for Genuine Parts has been lowered from $100 to $92. Genuine Parts shares have surged 13.64% over the past 52 weeks,...




 

Genuine Parts Company (NYSE:GPC) distributes automotive parts and industrial replacement parts (engine parts for heavy machinery) to auto repair businesses and manufacturers. The company also sells office products to large retailers. GPC operates in a mature market with many players, and the products it distributes are commodities with many substitutes available in the marketplace, resulting in ongoing pricing pressure from competitors.

DEI auto sales have also been negatively affected by the trend of longer lasting manufacturers warranties. Over the last several years longer warranties have become the industry standard on new cars; when cars are under warranty, drivers are more likely to go to the car dealership for free repairs, than to visit DEI's clients.

Company Overview

Business Financials

In 2009, GPC earned a total of $10.0 billion in total revenues. This was a significant decline from its 2008 total revenues of $11.0 billion. Unsurprisingly, this had a negative impact on GPC's net income. Between 2008 and 2009, GPC's net income declined from $475 million in 2008 to a net income of $400 million in 2009.[1]

Business Segments

Genuine Parts Co. divides its business into four segments: Automotive Parts , Industrial Machinery Parts, Office Products, and Electrical/Electronic Materials (insulating and conducting materials). Its Automotive Parts group distributes over 300,000 products to retail customers through its 58 NAPA (National Automotive Parts Association) distribution centers across the US. The Industrial Parts Group, operating under the name Motion Industries, provides customized product and technical expertise to the manufacturing industry. The Office Products group distributes over 30,000 business products from 44 distribution centers across the U.S. and Canada under the name S.P. Richards Company. The Electrical/Electronic Materials Group was formed in 1998 through the acquisition of EIS, the nation's largest distributor of electronic and electrical apparatus. The group distributes over 100,000 items from 33 locations across the U.S. and Mexico.

Trends and Forces

Longer manufacturer warranties mean less business for DEI's clients

Longer manufacturer warranties have become the industry standard in recent years. These warranties, which offer free repairs, motivate car owners to do repairs at the dealership rather than through NAPA stores for the first few years of ownership. This in turn hurts GPC's business, as the repairs are offered for free.

Outsourcing of manufacturing erodes client base

Increased outsourcing of North American manufacturing will hurt GPC's bottom line as its subsidiaries lie entirely in the US, Canada and Mexico. A study conducted by "PERI" of the Univ. of Massachusetts found that "foreign sourced goods in total manufacture inputs, a significant indicator of the extent of outsourcing activity, rose from 12.4% to 22.1% in the manufacturing sector as a whole.

Competitors

As a conglomerate, GPC encounters different competitive pressures in the respective industries in which its subsidiaries operate. GPC's business structure allows it to leverage its core competencies as a distributor across its business interests. This also leads to cost savings in the sharing of back office and HR facilities.

  • Automotive Parts Distribution, these companies compete with Genuine Parts for individual car owners:
  1. Automobile Manufacturers and Car Dealerships
  2. AutoZone (AZO)
  3. Advance Auto Parts (AAP)
  • Industrial Parts Distribution, these companies compete with Genuine Parts for heavy machinery part distribution:
  1. Applied Information Tech.
  2. General Motors (GM)
  • Office Supplies, these companies compete with Genuine Parts for distrubition of office supplies to American businesses:
  1. Officemax (OMX)
  2. Office Depot (ODP)
  3. Staples (SPLS)
  • Electronic Supplies, these companies compete with Genuine Parts for distribution of Electronic components:
  1. Micron Technology (MU)
  2. Atmel (ATML)
  3. Advanced Micro Devices (AMD)

Footnotes

  1. GPC 10-K 2009 Item 6 Pg. 13
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