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Group 1 Automotive, Inc. (GPI) has made the Zacks #1 Rank Top Performers List for Monday with a gain of more than 8%. Volume is at 478,000 shares, which is below the daily average of 833,000.

Earnings estimates for GPI have gained sharply over the past 2 months. Furthermore, the company announced a solid third-quarter report in late October that included a positive EPS surprise.

Group 1 Automotive is a leading operator and consolidator in the highly fragmented automotive retailing industry. The company owns dealership franchises from where it sells new and used cars and light trucks, while also providing maintenance and repair services, selling replacement parts and arranging vehicle financing, insurance and service contracts.

GPI is a representative of the retail/wholesale auto/truck industry on today's Zacks #1 Rank List, as are CarMax, Inc. (KMX) and Penske Automotive Group, Inc. (PAG). (In total, there are 224 stocks on today's List.)

Earnings Estimates for Group 1 Automotive

The Zacks Consensus Estimate for this year is at $1.75 per share, marking a more than 24% gain over the last 2 months from $1.41. There has also been a slight, 2-cent gain in this guidance over the last 30 days.

GPI revised its 2009 earnings guidance to between $1.66 and $1.76 during its third quarter report.

Meanwhile, the Zacks Consensus Estimate for next year is $2.36, which suggests that Group 1 Automotive could put together sharp year-over-year profit growth of 35%. This guidance has gained more than 23% in the past 2 months from $1.91, and has also advanced from $2.29 in 30 days.

Third Quarter

In late October, Group 1 Automotive announced adjusted EPS from continuing operations of 71 cents for the third quarter. The result inched past the Zacks Consensus Estimate of 70 cents. It was the fourth straight quarter of better-than-expected results. In fact, the company has amassed an average surprise of more than 200% in those 4 quarters (mostly because of a 700% beat in last year's fourth quarter).

Total revenues declined to approximately $1.25 billion from $1.43 billion. The company sold 25,057 new vehicles during the quarter, and 4,874 were part of the CARS program.

"Our strong third-quarter performance validates that Group 1's business model is flexible enough to react quickly to changes in market conditions," said President and CEO of Group 1 Automotive Earl J. Hesterberg. "The cost reductions and inventory controls we implemented in the first half of the year have positioned Group 1 to benefit from any improvement in new vehicle volumes, as demonstrated this quarter."

Zacks Investment Research

China Automotive Systems, Inc. (CAAS) just reported strong third-quarter results that easily beat expectations and raised its 2009 full-year guidance.

Third-Quarter Results

Sales were up 75% from last year to $64.7 million. Earnings also came in strong at 28 cents per share, 12 cents ahead of the Zacks Consensus Estimate. The company has beat in each of the last 3 quarters by an average of 82%.

The company said noted its cash balance increased 23% from last year to $45.9 million, while its stockholder equity was up 18% to $123.7 million.

Bullish Guidance

We haven't seen estimates advance yet, but the company did offer bullish guidance, saying it expects sales to increase by 40% for 2009.

The Chart

This Zacks #2 rank stock has been on fire over the last 5 months after bottoming out around $5 in early summer. Shares spiked higher on the earnings surprise but have since pulled back a bit, take a look below.

Last Week's Momentum Zacks Rank Buy Stocks

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Group 1 Automotive Inc. (GPI) is up more than 200% in the last 8 months, but analysts see more upside, with the next-year estimate projecting 35% earnings growth. Read Full Article.

World Fuel Services Corp. (INT) just reported better than expected Q3 results, making it four out of the last four quarters that the company has beat the Street. Read Full Article.

J. Crew Group Inc. (JCG) is trading higher ahead of its Nov 24 Q3 earnings announcement, keeping the momentum from the company's strong Q2 results in tact. Read Full Article. Zacks Investment Research

Group 1 Automotive Inc. (GPI) is up more than 200% in the last 8 months, but analysts see more upside, with the next-year estimate projecting 35% earnings growth. Company Description Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry selling both new and used cars and providing various services. The company was founded [...]

(GPI) Group 1 Automotive Incorporation – Good Earnings on Declining Sales

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Zacks Investment Research

Group 1 Automotive Inc. (GPI) is up more than 200% in the last 8 months, but analysts see more upside, with the next-year estimate projecting 35% earnings growth.

Company Description

Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry selling both new and used cars and providing various services. The company was founded in 1995 and has a market cap of $659 million.

Shares of GPI are up huge over the last 8 months after bottoming out just shy of $8 in mid February. The company's recent third-quarter results, reported on Oct 27 came in better than expected, and while shares did trade lower off the news, the macro-level trend higher is still in tact.

Third-Quarter Results

Sales were down 14% from last year to $1.2 billion, but earnings came in strong at 71 cents per share, one penny ahead of the Zacks Consensus Estimate. The company has beat in each of the last four quarter by an average of 7 cents, or 202%.

Group 1 noted that its results were helped by the cash for clunkers program, but added that it is utilizing more effective inventory management processes and cutting costs to drive its earnings moving forward. At the end of the quarter its new vehicle inventory was $298.7 million, down $76 million from the previous quarter and $370.6 million from last year.

Group 1 also said it aims to reduce its 2009 SGA expenses by $120 million from the previous year.

Estimates Jump

Estimates moved higher on the good quarter and optimistic view, with the current year adding 28 cents and moving to $1.75. The next-year estimate is bullish, pegged at $2.36, a 35% growth projection.

Valuation

In spite of the recent gains, this stock still looks reasonably priced, trading with a forward P/E of 15X, a discount to the overall market.

The Chart

Shares of GPI pulled back a bit on the earnings announcement but have since recovered after rebounding from a long-term trend line. The 52-week high is close at hand just above $35.

Zacks Investment Research

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