April 5th – The Day I Let Go of LKQ (And My Dignity). Units of Stock Sold: 355,108. Proceeds: $10.85m. Hours Spent Scrutinizing 13F Filings: 3. Number of Times I Said “This Was Always the Plan”: 27.
What Happened
Goodman Financial Corp, that most diligent of institutional investors, has finally admitted defeat in the LKQ saga. On Thursday, they filed with the SEC to divest their entire holding of 355,108 shares in this once-beloved auto parts purveyor. The transaction, valued at $10.85 million using quarterly average pricing, reads like the sad end to a long-term relationship: “We both knew it was time. You’re not… growing.” [LKQ +0.42%]
What Else to Know
Post-LKQ, Goodman’s portfolio now resembles a well-curated brunch menu:
- SPDW: $36.34m (6.9% of AUM) – the avocado toast of equities
- VCSH: $31.52m (6.0%) – because high-yield bonds are so 2023
- NXT: $28.75m (5.4%) – tech with a side of nervous energy
- VMBS: $23.61m (4.5%) – mortgage bonds, because stability is overrated
- SCHW: $19.80m (3.7%) – the Charles Schwab of “safe bets”
LKQ shares currently languish at $33.19, down 8% year-to-date. Meanwhile, the S&P 500 has gone off like a champagne cork. One wonders if the LKQ board received a memo titled “How to Underperform the Market While Pretending to Be Strategic.”
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $14.10 billion – impressive until you realize it’s 2019 levels |
| Net Income (TTM) | $697 million – enough to buy 21,000 artisanal lattes |
| Dividend Yield | 3.6% – the market’s version of “Here’s a participation trophy” |
| Price (as of Monday) | $33.19 – just shy of a third of what it was in 2021 |
Company Snapshot
- LKQ sells car parts to repair shops. Revolutionary.
- They distribute both new and recycled parts. Recycling is trendy, but can it be a moat?
- Serves “collision and mechanical repair shops” – i.e., places where people go when their cars behave like toddlers
LKQ describes itself as a “leading distributor,” which is code for “we have warehouses and trucks.” Their strategy? Operational efficiency and “broad product coverage.” Translated: “We’re not bad, but we’re not exceptional either.” Their Q3 results were particularly charming – revenue up 1.3%, adjusted EPS down 2 cents. A financial version of lukewarm tea.
What This Transaction Means for Investors
Let’s be clear: this isn’t about losing faith in LKQ’s business model. It’s about opportunity cost. Goodman’s portfolio now leans heavily on ETFs and fixed-income, which is the investment equivalent of wearing sensible shoes. With LKQ down 8% while the S&P dances upward, it’s less “goodbye” and more “see you later, maybe never.”
Their full-year adjusted EPS guidance now sits at $3.00-$3.15 post-Self Service segment sale. Free cash flow for Q3? A tidy $387 million. But when your stock price underperforms the market by 25 percentage points, even solid fundamentals feel like a consolation prize.
As a portfolio manager, I find myself wondering: is LKQ a case of “buy the dip” or “the dip is the new floor”? Their distribution network is extensive, their product range broad. But in an era where EVs are eating the world and supply chains are still bruised from pandemic-era chaos, does anyone really care about a 130-year-old company selling used bumpers?
The answer, apparently, is “not Goodman Financial Corp.” And honestly? I’m not mad. Opportunity cost is the thief of joy, after all. Just don’t tell my 401(k) I said that. 🤞
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2026-01-09 17:52