As investment firms look to diversify their portfolios and secure returns in an unpredictable market, Standard Motor Products, Inc. (NYSE:SMP) has caught the eye of HRT Financial LP. According to the latest filing with the Securities & Exchange Commission, HRT Financial LP recently acquired 24,334 shares of the auto parts company’s stock with a value of $846,000. This acquisition gives the firm a 0.11% stake in Standard Motor Products at the end of the reporting period.
At first glance, this may seem like just another technical announcement from an institutional investor but there are details within it which demonstrate the current investing climate. In anticipation of potential market swings and volatility caused by political uncertainty, many asset managers have been shifting towards reliable stocks with strong yields.
Standard Motor Products’s recently declared quarterly dividend provides investors holding SMP shares assurance in two ways: firstly, that even if share prices do drop or remain stagnant for a period, they will still be receiving cash payments; secondly, this dividend payout ratio reflects positively on Standard Motor Products as a company since they can afford to distribute nearly 54% of their profits as dividends.
However, it’s notable that amidst these positive developments for investors, two key insiders – Executive Vice President Dale Burks and Vice President Ray Nicholas – both sold significant amounts of SMP stock earlier this year. It remains to be seen whether this was purely coincidental or indicates anything deeper about their confidence in Standard Motor Products’ financial prospects.
The automotive industry has faced numerous challenges over recent years due to concerns around emissions and fossil fuels. Despite this backdrop of flux and confusion throughout the industry however, investments such as HRT Financial LP’s indicate faith is being placed in companies like Standard Motor Product who contributed revenues upwards of $1Bn last year alone. Investors are banking on continued stability and growth stemming from technological improvements and consumers’ changing attitudes towards car ownership.
As such regardless of the coming changes in the auto industry, it seems certain that savvy investors will continue to hunt for reliable sources of growth in their investment opportunities. With a long history and solid financials, Standard Motor Products is shaping up as one such choice.
Updated on: 03/06/2023
Institutional Investors Show Confidence in Standard Motor Products: Growing Support Amidst Industry Competitors
Standard Motor Products: Many Institutional Investors Show Confidence in Auto Parts Company
Standard Motor Products, Inc. (SMP) has recently seen an increase in stake amongst several hedge funds and institutional investors, including Inspire Investing LLC, Occudo Quantitative Strategies LP, and Walleye Capital LLC. Mutual of America Capital Management LLC and Zurcher Kantonalbank Zurich Cantonalbank have also lifted their positions in the auto parts company. In total, 75.14% of the stock is now owned by hedge funds and other institutional investors.
Several research firms have also commented on SMP’s performance, with Roth Capital issuing a “buy” rating on shares of Standard Motor Products in February 2017. TheStreet also upgraded SMP’s rating from a “c+” to a “b-” earlier this year.
Despite the growing confidence shown by investors and analysts alike, SMP’s most recent quarterly earnings report did not entirely stand out. While earnings per share (EPS) came in at $0.61 for Q1 2023, beating analyst expectations ($0.58), net margin remained low at 3.47%. Revenues were up slightly from the previous year but below consensus estimates.
On June 1st, SMP declared its quarterly dividend of $0.29 per share – representing an annualized dividend payout ratio of 53.70% and a yield of 3.24%. Though recently underperforming somewhat compared to competitor companies within the industry such as Denso Corporation or Mahle GmbH – both larger players – Standards Motors still appears to be holding its own among competitors with strong support from institutional investors continuing to demonstrate that stocks like this can branch out into various investment markets such as alternative investments being more specifically targeted toward pensions savings plan management as institutions take more interest in equity portfolios amidst declines observed in riskier asset classes such as bonds over the past decade.
Currently tipping around $35-$36 after a slight drop but is still worth paying attention to over the next few months as some predicting said during the accounting period, Standards Motor will post 3.5 EPS for the current fiscal year ahead of other closely watched statistics such as open interest rates.