Lithia Motors Inc.’s LAD shares gained 1.5% on Dec 22, after the company announced the acquisition of Barton Chrysler Jeep Dodge Ram Alpha Fiat in Spokane, WA. Lithia Motors already has BMW, Chevrolet Cadillac, Mercedes-Benz Sprinter, and Subaru stores in the area. The company will rechristen the newly acquired store as Lithia Chrysler Jeep Dodge Ram Alpha Fiat of Spokane. This store is expected to boost Lithia Motors’ revenues by $50 million per annum.
Lithia Motors is benefiting from the expansion of its business through acquisitions and store openings. On Oct 15, 2015, the company announced the purchase of two new stores. The first store, Crown Chrysler Jeep Dodge Ram Fiat in Concord, CA, was renamed as Lithia Chrysler Jeep Dodge Ram Fiat of Concord. The second one, Bennett Motors in Great Falls, MT, is called Lithia Subaru Hyundai GMC Buick of Great Falls following the acquisition. The two stores are expected to increase Lithia Motors’ annual revenues by $75 million. The company has complementary operations in both the markets and hence, the buyouts will enhance its scale of operations.
In Aug 2015, Lithia Motors announced the acquisition of a new store – Acura of Honolulu – in Hawaii. This is the company’s fourth store in the state and the only Acura store on the island of Oahu. It is also Lithia Motors’ second Honda/Acura store in the market, the other being Island Honda of Maui. The buyout is expected to boost Lithia Motors’ annual revenues by around $50 million. It will also help strengthen the company’s position in the Hawaii market.
In the same month, Lithia Motors acquired the Bitterroot Ford store located in Missoula, MT. The store, renamed Lithia Ford of Missoula, is estimated to generate annual revenues of $50 million. This is Lithia Motors’ first Ford store in the state and is anticipated to complement the existing stores – Missoula CJD and Toyota.
In Jan 2015, Lithia Motors opened a Subaru franchise store in Clearlake, TX. The company expects that this store will add $45 million to its annual revenues.
Lithia Motors currently carries a Zacks Rank #2 (Buy). Other well-ranked stocks in the same industry include General Motors Co. GM, O'Reilly Automotive Inc. ORLY and Fox Factory Holding Corp FOXF. General Motors currently carries a Zacks Rank #1 (Strong Buy), while O'Reilly and Fox Factory carry a Zacks Rank #2.
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