Core Insights - LKQ Corporation (NASDAQ: LKQ) faced challenges last summer, including a significant profit decline, indicating a need for internal maintenance and strategic adjustments [1]. Group 1 - The investing group "Value In Corporate Events" provides members with opportunities to capitalize on major corporate events such as IPOs, mergers & acquisitions, and earnings reports [1]. - The service covers approximately 10 major events each month, focusing on identifying the best investment opportunities [1].

Core Insights - LKQ Corporation (NASDAQ: LKQ) faced challenges last summer, including a significant profit decline, indicating a need for internal maintenance and strategic adjustments [1]. Group 1: Company Overview - LKQ Corporation is positioned as a leader in the automotive parts industry, focusing on providing high-quality replacement parts and services [1]. - The company is part of a broader investment group, Value In Corporate Events, which aims to identify actionable investment opportunities through major corporate events such as earnings reports and mergers [1]. Group 2: Investment Opportunities - The investment group covers approximately 10 major events monthly, targeting IPOs, mergers & acquisitions, and changes in corporate capital allocation to find the best investment opportunities [1].

Core Insights - Palm Valley Capital Fund experienced a 2.35% appreciation in Q3 2025, underperforming compared to the S&P SmallCap 600's 9.11% gain and the Morningstar Small Cap Total Return Index's 7.99% rise [1] - The fund's allocation to cash equivalents increased from 73.5% to 74.1% during the quarter, reflecting a cautious investment strategy [1] - Small-cap stocks outperformed large caps during this period, driven by expectations of Federal Reserve easing and reduced tariff concerns impacting corporate profits [1] Company Insights: LKQ Corporation - LKQ Corporation is identified as a leading distributor of vehicle products and parts, focusing on aftermarket and recycled auto parts in the U.S. and Europe [2][3] - The stock of LKQ Corporation saw a one-month return of -7.711% and a 52-week decline of 21.97%, closing at $29.97 per share with a market capitalization of $7.711 billion on October 7, 2025 [2] - LKQ's business model is characterized by sourcing a significant percentage of its parts from recycled vehicles, making it resilient during economic downturns [3] - Demand for LKQ's products is influenced by factors such as repairable auto insurance claims, parts inflation, the aging vehicle fleet, and trends towards non-OEM parts and electronic vehicles [3]

Group 1: Hormel Foods Corp. - Hormel Foods Corp. is known for its products like ham and bacon, but it owns around 40 brands and sells in approximately 80 countries [4] - The stock experienced a 17% decline in the third quarter due to rising costs for pork and beef, which are impacting profit margins [4] - At a recent price of about $25, the stock trades at 1.1 times revenue and 2.7 times book value, which are considered attractive multiples [4][5] - Despite Wall Street's lack of enthusiasm, with only two out of twelve analysts rating it a "buy," the company has a strong historical record, having never posted a loss since going public in 1928 [5] Group 2: Amdocs Ltd. - Amdocs Ltd. provides software and services primarily to communications and entertainment companies, with a significant historical reliance on AT&T as a customer [6] - The stock fell over 9% in the latest quarter, but six out of seven analysts covering it recommend buying [6] - Revenue decreased by about 3% over the past year due to shedding low-margin businesses, while earnings increased [7] Group 3: Eastman Chemical Co. - Eastman Chemical Co. shares fell 17% in the recent quarter, attributed to signs of a slowing economy [10] - Insider purchases were noted, with the CEO and CFO increasing their stakes, indicating confidence in the company's long-term prospects [9] Group 4: LKQ Corp. - LKQ Corp. recycles auto parts and operates around 1,500 high-tech junkyards in the U.S. and Europe [11] - The stock declined nearly 17% in the past quarter, with sales and earnings missing expectations, particularly in European operations [12] - The expectation is that rising car prices in the U.S. due to tariffs may lead consumers to keep their cars longer, benefiting the recycled-parts business [11] Group 5: Ingredion Inc. - Ingredion Inc. produces ingredients for foods and beverages, with a focus on sweeteners [13] - Despite a revenue dip in the past year, earnings remained strong, yet the stock fell 9% last quarter [13] - The company has achieved a return on stockholders' equity of 15% in 11 of the past 15 years, and the stock is considered cheap at 12 times earnings [13]

Core Points - LKQ Corporation has completed the sale of its Self Service segment, "Pick Your Part," to an affiliate of Pacific Avenue Capital Partners for an enterprise value of $410 million, subject to customary purchase price adjustments [1][2] - The CEO of LKQ stated that the sale aligns with the company's strategic priorities to simplify its business portfolio and reduce costs while aiming to expand margins as market conditions improve [2] - Proceeds from the transaction will be utilized to strengthen LKQ's balance sheet through debt repayment, supporting the company's disciplined capital allocation strategy [2] - Following the sale, LKQ will report the Self Service segment as discontinued operations in its consolidated financial statements starting with the third quarter 2025 earnings release scheduled for October 30, 2025 [2] Company Overview - LKQ Corporation is a leading provider of alternative and specialty parts for the repair and accessorization of automobiles and other vehicles, with operations in North America, Europe, and Taiwan [4] - The company offers a wide range of OEM recycled and aftermarket parts, replacement systems, components, equipment, and services for various types of vehicles [4] Advisory Information - Jefferies LLC acted as the financial advisor and Wachtell, Lipton, Rosen & Katz served as the legal advisor to LKQ in connection with the transaction [3]

Core Insights - LKQ Corporation has a market cap of $7.7 billion and is a leading distributor of automotive replacement, recycled, remanufactured, and specialty parts, serving various customers including repair shops and individual consumers [1][2] Company Overview - LKQ is classified as a "mid-cap" stock, with its market leadership attributed to a robust global distribution and logistics network that ensures high parts availability and quick delivery [2] - The company's diverse product portfolio includes aftermarket, recycled, remanufactured, and specialty parts [2] Stock Performance - LKQ shares have decreased by 33.1% from their 52-week high of $44.82 and have fallen 18.8% over the past three months, underperforming the Nasdaq Composite, which rose by 12.1% in the same period [3] - Year-to-date, LKQ stock is down 18.4%, lagging behind the Nasdaq Composite's 15.9% increase [4] - Over the past 52 weeks, LKQ shares have declined by 23.3%, while the Nasdaq Composite has seen a slight increase of 23.8% [4] Recent Financial Performance - On July 24, LKQ announced Q2 2025 earnings, revealing a 17.8% drop in shares following a lowered 2025 guidance due to weaker repairable claims in North America and challenging conditions in Europe [5] - The company expects adjusted EPS to be between $3.00 and $3.30, with a projected decline of 1.5% to 3.5% in organic parts and services revenue [5] - LKQ reported revenue of $3.6 billion, a decrease of 1.9% year-over-year, with organic parts and services revenue falling by 3.4% [5] - Adjusted EPS also fell by 11.2% to $0.87 [5] Competitive Landscape - In comparison, rival AutoZone, Inc. has performed better, with a year-to-date stock gain of 29.2% and a 33% return over the past 52 weeks [6]

Core Viewpoint - LKQ Corporation is set to release its third quarter 2025 financial results on October 30, 2025, and will host a conference call to discuss these results with senior management [1]. Group 1: Financial Results Announcement - LKQ Corporation will announce its third quarter 2025 financial results on October 30, 2025 [1]. - The conference call to discuss the results will take place at 8:00 a.m. Eastern Time [2]. - The call can be accessed by dialing (833) 470-1428 for domestic calls and (404) 975-4839 for international calls, with a conference ID of 810538 required [2]. Group 2: Webcast and Replay Information - An audio webcast and accompanying slide presentation will be available on LKQ's Investor Relations section of their website [3]. - A replay of the conference call will be accessible by telephone and online, with the telephone replay requiring conference ID 158780 [4]. - Both replay formats will be available until November 6, 2025 [4]. Group 3: Company Overview - LKQ Corporation is a leading provider of alternative and specialty parts for automobiles and other vehicles, with operations in North America, Europe, and Taiwan [5]. - The company offers a wide range of OE recycled and aftermarket parts, replacement systems, components, equipment, and services for various types of vehicles [5].

Core Viewpoint - U.S. small-cap stocks are experiencing significant performance gains, outperforming large-cap stocks, with expectations for further growth if the Federal Reserve cuts interest rates [1][2][6]. Small-Cap Stock Performance - The S&P Small Cap 600 Index has increased by 10.7% in the last three months and 4.1% over the past 30 days, while the S&P 500 Index has risen by 8.9% and 1.8% respectively [1]. - Small-cap stocks are more sensitive to economic conditions and interest rate changes, making them a focal point for potential investment opportunities [4][6]. Interest Rate Impact - A projected 0.25% cut in the federal funds rate is anticipated to benefit small-cap companies by lowering borrowing costs, which is crucial as these companies often rely on debt financing [2][3]. - Lower interest rates are expected to enhance earnings power for small-cap firms by reducing interest expenses [3]. Economic Growth and Small-Caps - If lower rates stimulate the economy and growth stabilizes or accelerates, small-cap stocks are likely to outperform as they typically do in the early to mid-stages of economic expansion [4][6]. - However, if rate cuts are a response to economic weakness, small-cap stocks may underperform due to their cyclical nature [6]. Notable Small-Cap Stocks - **Patrick Industries**: Year-to-date performance of 37.00%, expected to benefit from lower rates leading to volume growth and a successful M&A strategy [8]. - **Federal Signal**: Year-to-date performance of 38.00%, poised for growth due to lower borrowing rates for industrial customers and benefits from infrastructure spending [9][10]. - **LKQ Corporation**: Year-to-date performance of -10.42%, positioned to gain from increased demand for vehicle parts as consumers extend the life of their vehicles amid high prices [11][12]. Investment Strategies - The small-cap sector presents opportunities for value addition through mutual funds or active ETFs, especially as information asymmetry increases with smaller companies [13]. - Investors are advised to seek quality managers who focus on well-valued companies and maintain close relationships with company management for better monitoring [14].

Group 1 - The Carillon Scout Mid Cap Fund's second quarter 2025 investor letter indicates that the Russell Midcap Index experienced positive returns despite an initial sell-off in April due to tariff announcements [1] - LKQ Corporation (NASDAQ:LKQ) is highlighted as a key stock, with a one-month return of 7.27% and a 52-week loss of 17.11%, closing at $32.31 per share with a market capitalization of $8.313 billion as of September 09, 2025 [2] - The fund notes that LKQ Corporation's performance has been affected by rising repair costs leading to a decline in demand for its products, compounded by bad weather in Europe and tariff uncertainties [3] Group 2 - LKQ Corporation is not among the top 30 most popular stocks among hedge funds, with 32 hedge fund portfolios holding the stock at the end of the second quarter, down from 33 in the previous quarter [4] - While LKQ Corporation is recognized for its potential, the analysis suggests that certain AI stocks may offer greater upside potential and lower downside risk [4] - Additional insights on LKQ Corporation can be found in other investor letters and analyses from hedge funds [5]

Core Insights - LKQ Corporation has entered into a definitive agreement to sell its Self Service segment, "Pick Your Part," to Pacific Avenue Capital Partners for an enterprise value of $410 million, subject to customary post-closing adjustments [1][2] - The sale is part of LKQ's multi-year transformation strategy aimed at simplifying its corporate structure and focusing on core segments, as stated by the company's President and CEO, Justin Jude [2] - The net proceeds from the sale will be utilized to strengthen LKQ's balance sheet through debt repayment [2] Transaction Details - The transaction is expected to be completed in the fourth quarter of 2025, pending customary closing conditions and regulatory approvals [3] - Jefferies LLC acted as the financial advisor, while Wachtell, Lipton, Rosen & Katz served as the legal advisor for LKQ in this transaction [3] Company Overview - LKQ Corporation is a leading provider of alternative and specialty parts for automobiles and other vehicles, with operations in North America, Europe, and Taiwan [4] - The company offers a wide range of OEM recycled and aftermarket parts, replacement systems, components, equipment, and services for various vehicles [4]