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Auto Retail Index Up 11.66% in Wake of Election

Kerrigan Auto Retail Index indicates auto retail stocks reacting positively to Trump election, outperforming S&P by 240.9%

IRVINE, Calif.--(BUSINESS WIRE)--Kerrigan Advisors today announced that The Kerrigan Auto Retail Index was up 11.66% in the month of November, significantly outperforming the broader S&P 500 Index by 240.9%. With no earnings announcements or other major industry events, The Kerrigan Auto Retail Index attributes the rise to the election of Donald Trump.

“While the Trump administration is still in formation, we believe stocks are reacting to key themes which portend strong auto sales,” said Erin Kerrigan, Managing Director of Kerrigan Advisors. “First amongst these is Trump’s stated focus on domestic job creation as well as his advocacy for aggressive spending on infrastructure, including roads, bridges and ports, which could increase employment and add to commercial vehicle demand. In addition, we believe the index is reacting positively to his proposals to stimulate the economy with tax cuts.”

The Kerrigan Auto Retail Index, which is a monthly index for the auto retail industry covering the seven publicly traded auto retail companies with operations focused on the US market, shows the following key trends in the month of November:

  • The Index rose 11.66% overall in November
  • The Index outperformed the broader S&P 500 Index, which increased 3.42%
  • Each of the seven component stocks in the index were up in November
  • Four of the stocks up over 15% for the month
  • Group 1 Automotive posted the strongest gain with an increase of 20.44%, followed by Sonic Automotive (+18.16%), CarMax (+15.72%) and Asbury Automotive Group (+15.31%)

“More specific to auto retail, the incoming Trump administration is assumed to be more business-friendly, and could slow, if not disband, regulatory initiatives such as the Consumer Financial Protection Bureau (CFPB) and increased CAFÉ mileage requirements, both moves seen as highly positive to auto retail,” continued Ryan Kerrigan, Managing Director of Kerrigan Advisors.

The Kerrigan Auto Retail Index is designed to help public and private auto retailers understand the true value of their dealerships, while also providing key insights into factors influencing valuations of these public companies, with broader implications for the auto industry as a whole. To access the Kerrigan Auto Retail Indexclick here.

Kerrigan Advisors also releases The Blue Sky Report™ four times a year and includes Kerrigan Advisors’ signature blue sky charts, multiples and analysis for each franchise in the luxury and non-luxury segments. The multiples are based on Kerrigan Advisors’ view of franchise values in the current buy/sell market and can be applied to adjusted pre-tax dealership earnings to estimate blue sky value. To download The Blue Sky Report, click here.

Erin Kerrigan is Managing Director of Kerrigan Advisors, and is a recognized industry expert on dealership valuation, real estate and buy/sells. A sought after commentator on automotive retailing topics ranging from consumer auto buying trends to auto retail consolidation to private equity in auto retail, she has keynoted numerous automotive conferences and her analysis has appeared in publications such as Automotive News and the Wall Street Journal. For a recent video of Erin’s commentary on the market, click here.

Ryan Kerrigan is Managing Director of Kerrigan Advisors and an expert on US auto retail buy-sell transactions. Ryan served as Managing Director at Serent Capital, a $250mm private equity fund investing in middle market companies. Prior, he briefly served as General Manager of the family’s auto dealership. Mr. Kerrigan began his career as a management consultant at McKinsey & Company, where he advised Fortune 500 companies on growth strategies, organizational issues, pricing and business valuation.

About Kerrigan Advisors

Kerrigan Advisors is a national dealership buy/sell advisory firm focused on providing a high level of client service for dealership sellers. Led by a team of veteran advisors who have represented transactions totaling over $2 billion dollars in automotive, private equity and investment banking, Kerrigan Advisors customizes each sale process to maximize the seller’s transaction proceeds. With the most comprehensive buyer database in the industry, Kerrigan Advisors has the industry context and expertise to match each seller with the right buyer.

In addition to the monthly Kerrigan Auto Retail Index, each quarter, Kerrigan Advisors publishes The Blue Sky Report™, a Kerrigan Quarterly, which is the auto industry's most comprehensive and authoritative quarterly report and analysis of dealership buy/sell activity and franchise values. Kerrigan Advisors’ Managing Director Erin Kerrigan, who authors the report, is a recognized industry expert on dealership valuation, real estate and buy/sells, and is a frequent speaker at leading auto retail events and conferences, including NADA, JD Power Automotive Roundtable, AICPA, NADC and Driving Sales’ President’s Club. She has also been a keynote speaker for events hosted by American Honda Motor Company, Audi of America, US Trust, Ohio Automobile Dealer Association, and SunTrust Bank and has led webinars for NADA and Automotive News. Her expertise is also featured in a monthly column for Dealer Magazine.

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