Time To Replace Replacement Auto Parts Maker Dorman Products

ab analytical servicesBy Alan Brochstein, CFA:

I have been following Dorman Products (DORM) closely for 4 years, having previously shared highly favorable views beginning in early 2009. The stock has been a great performer since the Great Recession, as it was very cheap four years ago and then benefited from the trends of used cars staying on the road longer and the shift from dealer-owned car repair shops to independents or do-it-yourself repair. I have been patiently awaiting the right time to formally recommend sale of the stock, and it now has likely priced in the continuation of very strong fundamentals that are likely to deteriorate. I recommend selling DORM, with an anticipated target of 28 in a year, based on 13 P/E on estimates that are below the current consensus (-17% projected return), with the potential of a 26% decline if its above-average margins revert.

What Does Dorman Do?

DORM, based near Philadelphia,


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