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Happy New Year for the automotive aftermarket industry! Following up on our popular blog post “What If You Invested $1,000 in Automotive Aftermarket Companies” the Hedges & Company Automotive Aftermarket Index finished 2010 with a 48% gain. In a dramatic comparison, the S&P 500 only increased 11% in 2010.
Not only did the Hedges & Company Automotive Aftermarket Index outperform the S&P, but aside from a slight blip in June and July, the rise was steady and constant. Compared to the 2008 baseline (gray line in chart), 2010 was clearly a breakout year. The index bounced around the baseline for 2008 and 2009, but by late summer 2010, the index was 34% ahead of the baseline and didn’t look back.
The S&P by comparison (green line in chart) vacillated throughout 2010 and ended December with a last minute flourish to finish 11% higher than January. The S&P was at 1132.99 January 4, 2010 and closed at 1257.64 on December 31, 2010.
If you would have invested $1,000 in the automotive aftermarket on January 1, 2008 your investment would be worth $1,601.43. On the other hand, $1,000 invested in the S&P 500 would now be worth $900.30 (excluding dividends).
Clearly the automotive aftermarket industry is strong, healthy and poised to have a great 2011.
Financial disclaimer: Hedges & Company is not attempting to give any financial advice; investments are subject to risk; carefully review and consider a prospectus before making any investment decisions. Full disclosure: Hedges & Company principals do not directly own stock in any of the companies listed.
Is this an indicator of the overall strength of the after market segment or, is it a better indicator of the strength of the company itself (Hedges & Company)? Either, of course, would be great had I had the opportunity and foresight to make that initial investment. So far, since about 1989, I see more and more difficulties in all after market automotive goods and services as the Government makes it’s approach to stiffer controls. As for the business of Hedges & Company, I see additional benefits ahead ( Money Wise ) as the need to obtain market information at a faster rate becomes the most significant opportunity for after market manufactures to push ahead with specific products and or services.