An Insider Bought Shares of Genuine Parts

Adage Capital Management, which is managed by Phil Gross and Robert Atchinson, owned about 850,000 shares of Genuine Parts at the end of the third quarter (see more stock picks from Adage). Gross and Atchinson had previously worked at Harvard Management. Renaissance Technologies, which has performed well enough since its founding by Jim Simons to make him a multi-billionaire, nearly tripled its stake to a little over 500,000 shares (check out more stocks Renaissance was buying).

General Motors Company (NYSE:GM) has been a hot value stock pick, and peer Ford Motor Company (NYSE:F) sees some interest as well. These two stocks carry forward P/Es of 7 and 9, respectively. Of course as we’ve mentioned the auto market remains depressed, notably in Europe, and so the automakers tend to trade at low multiples.

We can also compare Genuine Parts to auto parts stores such as Advance Auto Parts, Inc. (NYSE:AAP) and AutoZone, Inc. (NYSE:AZO). The forward earnings multiples at these two peers are in the 11-13 range, so between where we find Genuine Parts and the automakers. Betas are low at these two companies as well, suggesting that they are at least as well protected on the macro downside as their larger peer. However, earnings growth was weaker at AutoZone last quarter versus a year earlier and Advance actually had its net income come in lower.

We can see why Genuine Parts might merit a premium to some other auto related companies, but we’re not sure that it’s really a better buy than GM, Ford, or other automakers which are currently priced at very low levels. In addition, auto parts stores such as Advance and AutoZone also trade at discounts to Genuine Parts and it may be worth looking to see if that gap could narrow.