The Best Stock in Oregon: Lithia Motors
We analyzed publicly traded companies based in the Beaver State to identify the best stock in Oregon to buy now.
A word of caution: Since we selected a single stock from each state (plus one from D.C), and choices in some states are sparse, a few of our picks are best suited to investors comfortable with a higher degree of risk. This is not necessarily one of our 51 favorite stocks in the entire U.S., in other words.
Lithia Motors by the Numbers
- Headquarters: Medford
- Share price: $88.65
- Market value: $2.2 billion
- Price-earnings ratio: 10
(Prices and data are as of June 22, 2017)
Lithia sells new and used cars and related services at 154 dealerships on the East Coast and in the western U.S. Analysts believe U.S. light vehicle sales may have peaked in 2016, but not Lithia’s, says CFRA analyst Efraim Levy. He projects growth of 10% this year, driven by strong employment, easy credit and an aging vehicle fleet indicating pent-up demand. Lithia’s sales are also growing by acquisition, with 15 new dealerships last year and thousands of potential targets on the radar for the years ahead. The strength of Lithia’s business model, says Morningstar analyst David Whiston, lies in its acquisition of rural dealerships, through which the company can position itself as the only seller of a particular brand within a huge geographic radius. Lithia’s large market shares in small cities give the company pricing power, he says. And Lithia can continue to grow through acquisition in urban areas as well, says Levy. He rates the stock a “buy” with a 12-month price target of $103.