Skip to main content

The Globe and Mail

What investing gurus like about this auto replacement parts company

Marin Tomas/Getty Images/iStockphoto

Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.

Pennsylvania-based Dorman Products sells auto replacement parts and fasteners and products for the automotive after-market. It has a market cap of $2-billion (U.S.).

Dorman has grown earnings at a 29-per-cent pace over the long term (using an average of the 3-, 4- and 5-year EPS growth rates), which the Peter Lynch based model likes. It has grown sales at a 15-per-cent pace over long-term, (using an average of the 3-, 4-, and 5-year sales growth rates). And it has a 0.87 P/E-to-growth ratio, helping it get strong interest from the Lynch model.

Story continues below advertisement

The company gets strong interest from the Martin Zweig-based strategy, which likes that its earnings growth is strong and accelerating (35.7 per cent last quarter versus an average of 19.3 per cent in the three previous quarters).

Dorman has a strong 12-month relative strength of 80. It has no long term debt, which both the Lynch and Zweig models love.

Its 22-per-cent return on equity (12 month) is double the industry average.

Dorman has a 17.8-per-cent return on retained earnings over past decade, which the Warren Buffett-based model likes and it has a 4.7 current ratio, a sign of good liquidity, according to the Benjamin Graham-based approach.

John Reese is long DORM.

Click here for a complete breakdown of Validea's investing guru report.

Read other research reports here.

Story continues below advertisement

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.