Bottom line, we are at depression levels for new car sales and Jackson still has his company profitable with strong cash flows. I have hammered this point here before and will do so again. The market share gains AutoNation (AN) is achieving in this environment as thousands of rival dealerships have closed the past two years assure a strong recovery for the company.
Jacskon: “At $2 a gallon gas, people are not buying “green” vehicles and the migration back to big cars and SUV’s is already underway”
Jackson: If you want to sell “green” vehicles, you need to place a higher floor under gasoline prices.Let’s also not forget nearly 60% of the share are held by two people, Sears Holdings (SHLD) Eddie Lampert and Microsoft (MSFT) Founder Bill Gates. Auto demand does not disappear, it wanes and surges. While folks today will hold into their vehicles a little longer and repair them (witness recent sales at AutoZone (AZO))eventually they need to be replaced. Jackson and his company will be a much larger player in that field when it does happen.
Disclosure (“none” means no position):Long AN, SHLD, none
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