Kerrigan Advisors, one of the nation’s top buy/sell firms in automotive retail, recently released their 2020 Kerrigan Index Year-End Review. On today’s show, founder and managing director of Kerrigan Advisors, Erin Kerrigan discusses how the index performed in 2020 and what it could mean moving forward in 2021.
As many know, it ended up being quite a remarkable year for auto retailers despite challenges from the COVID-19 pandemic. The Kerrigan Index, which is comprised of the seven publicly traded auto retailers, outperformed the S&P 500. The Index ended the year up over 30%, whereas the S&P 500 was only up 16%. However, Kerrigan reminds us that this doesn’t tell the whole story.
Throughout 2020, the Kerrigan Index reaches highs and lows, even going down so far as 50%. The second half of the year saw major rebounds for auto retailers, rising well over 100%.
Several huge M&A transactions happened during 2020 as well. As Kerrigan Advisors finish analyzing the data for 2020’s Blue Sky Report, they expect the average dealer earnings to be around $2 million for the year. The strong industry results in Q3 and Q4 promoted buyers to be more aggressive with their M&A activity. So much so, that Kerrigan expects a record-breaking year for M&A.
Upon receiving her MBA, Erin Kerrigan began her career as an investment bank for Piper Jaffray. She also ran her family’s dealership before selling it in 2006. Prior to founding Kerrigan Advisors, she held the position of Senior Vice President at AutoStar and was the head of Presidio Automotive.