LKQ is the cheapest in its group at a P/E of 12, but has not grown for years, faces Europe ERP problems that usually take a few quarters, and has a free cash flow risk. LKQ could be repriced if the ERP situation and these numbers improve, but this is only a possibility and he has no insight whether it will happen.
“GPC (Best Value), AZO, ORLY, AAP, LKQ, AIT, GWW, FAST, MSM - Sector Analysis”
Value Investing with Sven Carlin, Ph.D.Published Oct 15 · 1 passage
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LKQ is the cheapest company in this group. They have been facing some problems in Europe with regard to the implementation of the new Enterprise Resource Planning (ERP) system .
It usually takes the company a few quarters . So, if the situation improves, it could be interesting. The price-to-earnings ratio is 12, and the dividend payout is 5%. They haven't grown in a few years, which also creates a problem .
This could also become a problem if the current free cash flow situation is not resolved. It's a cheap makeover process. If you want to check the workflow of the ERP system, if they can improve these numbers, the stock will be repriced.
However, it remains just a possibility, and I have no insight into whether that will happen.