Long Position on LAD @ $115.00 on 10/29/2015 (Momentum)

Lithia Motors, Inc. (LAD) is an operator of automotive franchises and a retailer of new and used vehicles and services.

The Company operates in three segments: Domestic, Import and Luxury.

The Domestic segment consists of retail automotive franchises that sell new vehicles of Chrysler, General Motors and Ford.

Its Import segment includes retail automotive franchises that sell new vehicles of Honda, Toyota, Subaru, Nissan and Volkswagen.

The Luxury segment consists of retail automotive franchises that sell new vehicles of BMW, Mercedes-Benz and Lexus. Its segment franchises sell used vehicles, parts and automotive services, and automotive finance and insurance products.

Its operations involve the use, handling, storage and contracting for recycling and disposal of materials such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products, lubricants, degreasing agents, tires and fuel.

Shares have formed a bullish "flag" following the company's latest quarterly report. For Q3, net income increased to $43.4 million or $1.64 per share from $34.5 million or $1.31 per share in the third quarter of 2014. Revenues for the reported quarter surged 61% to $2.1 billion from $1.3 billion in the year-ago quarter. The upside was driven by improved performance across all the segments. This is an all-time record high net income for the company. We expect higher share prices for this stock.

52-Weeks Trading Range: $71.49 - $122.01

Entry Point: $115.00

Stop Loss: $109.25

Target Price: $126.50

Updates

11/30/2015 11:55:39 AM

LAD closed at $124.50 after its 30 days expired.

Position closed on 11/30/2015 at price of $124.50 with a 8.26% gain in 32 days.

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