Penske Automotive Group (PAG) has recently outgrown its small-to-mid-cap designation by virtue of being the country’s fastest-growing auto dealer, notes Stephen Leeb, editor of The Complete Investor.

Earnings since 2008 have grown more than eightfold, an annualized rate in the high teens. The company’s eponymous leader is known for having assembled one of the most successful teams in race car history, with a record number of victories at the Indy 500 under his leadership.

But the company owes its leadership position less to the racing skills of its founder than to the skillful management of its auto brands.

Since 1967, Penske has been the No. 1 Toyota dealer in the U.S. Its flagship Longo Toyota dealership in California is the world’s largest dealership, spanning 50 acres. The company also represents Mercedes Benz, Lexus, and other premium brands along with U.S. automakers like Ford.

Several factors should continue to push earnings higher. A likely permanent effect of the pandemic will be fewer automotive inventories, resulting in higher margins for dealers.

For some time, used-car sales have been rising faster than new-car sales, an advantage for Penske thanks to its strong relationship with Toyota, which has a leading entry in virtually all categories of used cars. Penske also sells trucks.

We expect Penske’s profit growth to remain in double digits in the waning days of the internal combustion engine and to not miss a beat as EVs eventually take over.

Despite the strong stock gains, the company’s value metrics remain compelling as earnings have kept up with share price gains. Penske is a stock that checks the boxes for both value and growth alike.

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