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What moves this stock? - $LKQ
There is 101 reasons what could move this stock (or any stock) but the THREE that I think are worth keeping an eye on are:

  • Share repurchasing
  • Dividends
  • Return Metrics

$LKQ went from aggressive acquisitions to being "mature" ish business (in 2020) that is now focusing on cleaning things up and being strategic with all of the Free Cash Flow ($1Billion+ FCF on 14B Market Cap.).

Share repurchasing

2018 was the peak on the amount of outstanding shares...

Now with over one billion of FCF, company is committed to keep buying back shares at these levels or lower.

Dividends

Again now that the company is feeling comfortable with the amount of money they will be making, $LKQ started paying dividends for the first time.

Slow and steady, Forward NTM Yield - 1.91%

... its just a beginning...

Return Metrics

Return on Equity: 20%
Return on Invested Capital: 10%

Both I'm anticipating to keep on improving (little by little)

As a bonus their ESG report was an excellent "cherry on top" for ESG sensitive institutional investors to put their money in.

In conclusion, all these are potential positives that can move $LKQ as they keep executing but because they are large player and expending into Europe, the macro environment is not the brightest and I'm cautiously optimistic but as long as there is war between Russia and Ukraine there are other macro plays that can also move this stock.
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Interesting that for this business “What moves this stock” is things that are more directly in control of management— I.e. they can decide when to do share repurchases and what the dividend will be. Makes me think that more than most it’s helpful to listen to the earnings calls for this company and be listening for if management gives any hints about more share repurchases or changes to the dividend. Is that a fair assessment?
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Yegor's avatar
$181.8m follower assets
Nice to see a "not so deep dive" is planned :)

Always enjoy reading your letters, feels like its a good way to catch up with you.
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For the six months ended June 30, 2022, $LKQ has repurchased 10.8 million shares for $548 million, and since initiating the stock repurchase program in late October 2018, the Company has repurchased approximately 45 million shares for a total of $1.9 billion. In May 2022, the Board of Directors increased the total share repurchase authorization to $2.5 billion, effective through October 2024.
Yegor's avatar
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Monthly Newsletter 07/07:


Topics: Quote, Portfolio Update, Portfolio Discussion, Comments From Me, GIVEAWAY(s), Sunday Scaries Stock Talk pod, Much More Books, & Monthly Munchies.

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Monthly Newsletter 06/07:


Topics: Quote, Portfolio Update, Portfolio Discussion, Comments From Me, More Books, There Is No I In Success, & Monthly Munchies


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Yegor's avatar
$181.8m follower assets
$LKQ had investors day today, I will be listening to it later today or this week but here is a bit from presentation :
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Yegor's avatar
$181.8m follower assets
Monthly Newsletter 05/17:


Topics: Quote, Portfolio Update, Portfolio Discussion, More Books, What’s your “WHY”, & Monthly Munchies.

A great monthly update as always with insightful personal notes :) I've added Modern Monopolies and The Almanack of Naval Ravikant to my reading list. Also really cool that you found the free version of the book on the web. Thanks for sharing Yegor
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$LKQ Corporation Announces $500 Million Increase in Stock Repurchase Program; total authorized now $2.5 Billion through October 2024

Varun Laroyia, Executive Vice President and Chief Financial Officer of LKQ Corporation, stated: “The strength of the balance sheet and our expectations for continued free cash flow generation have the Company well positioned to execute on the expanded stock repurchase program. The strong financial metrics and the expansion of this program further validate our commitment to a disciplined capital allocation strategy that balances returning capital to our stockholders and investing in the continued growth of the Company.”
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