Niche leaders cope with slow car sales

Article Excerpt

The slowdown in the automotive industry has hurt the earnings of these four companies, which serve a number of auto-dependent customers. The potential bankruptcy of General Motors and Chrysler is also a risk factor. However, all four are leaders in their niche markets, which gives them special appeal. Their strong balance sheets will also help them weather the recession. We see all four as particularly attractive buys for long-term gains. GENUINE PARTS CO. $34 (New York symbol GPC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 159.4 million; Market cap: $5.4 billion; Price-to-sales ratio: 0.5; WSSF Rating: Average) distributes automotive replacement parts to over 4,700 independent outlets in North America. It also owns over 1,100 auto parts stores under the NAPA banner. The company distributes parts for older cars, so it stands to gain as the recession prompts drivers to fix their current cars instead of buying new ones. Genuine’s focus on older vehicles also means the possible bankruptcy of GM or…