10 Best Auto and Truck Dealership Stocks to Invest In

3. Lithia Motors, Inc. (NYSE:LAD)

Number of Hedge Fund Holders: 43

Lithia Motors, Inc. (NYSE:LAD) is a major automotive retailer that operates a wide network of dealerships and offers various services related to vehicle ownership. As per its third quarter report for fiscal 2024, the company has more than 99,000 vehicles in 467 stores across the United States, Canada, and the United Kingdom.

The company’s management has been focused on expanding its dealership network. On September 10, Lithia Motors, Inc. (NYSE:LAD) reported expanding its retail network in Florida by acquiring three dealerships from Duval Motor Company, located in Jacksonville and Gainesville. These dealerships are expected to generate over $200 million in annualized revenue, significantly boosting Lithia’s presence in the region.

During the fiscal third quarter results of 2024, the company reported record revenues of $9.2 billion, marking an 11% increase from $8.3 billion in the same quarter of 2023. In addition, management has been focused on improving its cost efficiency. It successfully reduced its adjusted Selling, General, and Administrative (SG&A) expenses from 67.9% of gross profit in the second quarter to 66% in the third quarter of 2024. The company has achieved $200 million in annualized cost savings, surpassing its initial target of $150 million. It is one of the best auto and truck dealership stocks to invest in.

Appalaches Capital stated the following regarding Lithia Motors, Inc. (NYSE:LAD)  in its Q3 2024 investor letter:

“Lithia Motors, Inc. (NYSE:LAD) reported earnings, which were expectedly weaker year-over-year, but results were still better than feared. The shares have run up quite a bit since our initial purchase, but we still own them at a price at which I believe is a significant discount to their intrinsic value.”