Standard Motor to Buyback Shares - Analyst Blog
May 21 2012 - 12:19PM
Zacks
Standard Motor Product
Inc. (SMP) announced that its Board of Directors has
approved the repurchase of an additional $5 million of common stock
under the existing share repurchase program. The newly approved
authorization is an addition to the previously completed $5 million
repurchase program authorized by the Board of Directors on August
25, 2011.
Standard Motor will repurchase the
shares periodically in the open market or through private
transaction. It will be funded by the company’s revolving credit
facility.
The repurchased shares will be
considered as treasury stock and will be used for general corporate
purposes including the plan for equity compensation. However, the
repurchase program can be stopped or suspended at any point of
time.
Standard Motor, based in Long
Island City in New York was founded in 1919. It is one of the
leading manufacturers, distributors and marketers of automotive
replacement parts in the U.S. Further it enjoys strong brand
recognition globally.
Standard Motor is in an
advantageous position due to the recent acquisition of Compressor
Works, which is a manufacturer of Temperature Control products with
a capacity of $60 million. The acquisition will lead to cost
savings and boost earnings of the company in 2012. However, strong
competition may ruin the company’s margins. Its competitors include
Visteon Corp. (VC) and Denso Corp.
As a result, the company retains a
Zacks #3 Rank, which translates into a short-term (1 to 3 months)
“Hold” rating and we have a long-term (more than 6 months)
“Neutral” recommendation on the stock.
STANDARD MOTOR (SMP): Free Stock Analysis Report
VISTEON CORP (VC): Free Stock Analysis Report
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