8 Best Car Repair Stocks to Invest In

3. Group 1 Automotive, Inc. (NYSE:GPI)

Number of Hedge Fund Holders: 40

Group 1 Automotive, Inc. (NYSE:GPI) is an international car retailer primarily operating in the United States and the United Kingdom. It owns around 338 franchises, 260 dealerships, and 44 collision centers, specializing in vehicle repairs after accidents. The company also operates AcceleRide, an omnichannel that facilitates the buying and selling of vehicles.

Group 1 Automotive, Inc. (NYSE:GPI) proved to be resilient in dealing with the CDK outage. It generated an all-time quarterly high of $5.2 billion in revenue, up 11% year-over-year. Its Parts and Services segment, which deals with car repairing, led the growth by improving 16% during the same time. Conventum – Alluvium Global Fund in its Q3 2024 investor letter mentioned that the company has remained resilient in a tough market environment. It has been growing its dealership network within the United States and the United Kingdom. For instance, management announced the acquisition of Inchcape’s retail operations, four Mercedes-Benz dealerships, and a large BMW store in Lincoln. The expansions will add 54 dealerships to its portfolio and allow the company to make around $2.7 billion in annual revenue from merely Inchcape’s retail operations. It is one of the best car repair stocks to invest in.

Conventum – Alluvium Global Fund stated the following regarding Group 1 Automotive, Inc. (NYSE:GPI) in its Q3 2024 investor letter:

“Group 1 Automotive, Inc. (NYSE:GPI) was up 29.0%. Its second quarter results appeared to be above market expectations. We mentioned in our last report that US car dealers were heavily affected by the CDK software outage, but it seems Group 1 fared better than most. And now, with the 54 Inchcape dealership acquisition about to close (which will double its UK size and add USD 2.7b to revenue), we have updated our analysis. The result? Well despite becoming a larger entity with an expected 25% increase in revenue and 30% increase in earnings, there is negligible change to our valuation. Notwithstanding, we have no reason to doubt management’s confidence in the merits of the transaction. The numbers do not always tell the full story (or even part of it), and to us it makes sense to build scale in the UK. After the price gain, the business now trades at a small premium to our valuation. Not enough, in our view, to warrant major selling but when it reached 5.0% of the Fund we sold a little (to end the quarter at 4.2%) and we increased our position in Autonation (up 12.3%) which we consider slightly cheaper.”