Author Archives: Scalper1
Wheeler On FCC Privacy Proposal: This Is About ISPs And Only ISPs
Federal regulators moved forward Thursday with a proposal to require that Internet service providers get customer consent to collect data for targeted advertising — a policy that ISPs claim would put them at a disadvantage vs. Internet companies such as Alphabet ’s ( GOOGL ) Google or Facebook ( FB ). The Federal Communications Commission, with three Democratic appointees and two Republicans, voted 3-2 along party lines to open a public comment period on the consumer privacy proposal. The agency could formally approve the rules by year-end. Comcast ( CMCSA ), AT&T ( T ) and Verizon Communications ( VZ ) are among ISPs that would be impacted by FCC Chairman Tom Wheeler’s proposal. “To be clear, this is not regulating what we often refer to as the edge — meaning the online applications and services that you access over the Internet, like Twitter and Uber,” said Wheeler in a statement. “It is narrowly focused on the personal information collected by broadband providers . . . this is about ISPs and only ISPs. “And this proposal does not prohibit ISPs from using and sharing customer data — it simply proposes that the ISP first obtain customers’ express permission before doing so.” The FCC in early 2015 reclassified broadband services as a public utility, using Title II of the Communications Act of 1934. AT&T, Comcast and industry trade groups are challenging the net neutrality rules in federal court, with a court ruling expected in April. The FCC’s new consumer privacy proposal seeks broadband authority under Section 222 of the Communications Act of 1934. Under the rules, providers would need to tell consumers what information is being collected, how it is being used and when it will be shared. While the Federal Trade Commission has rules to protect consumer privacy, the FCC says more regulation is needed. Commissioner Ajit Pai, a Republican, said Thursday that there is no good reason to single out broadband providers for regulations, while not regulating websites. The plan “favors one set of corporate interests over another,” he said.
As Drivers Hit The Road, Auto Parts Retailers Rake In The Profits
The auto parts industry group has slipped in the rankings in recent weeks, but it’s not for lack of solid companies in the group. It ranked No. 84 as of Thursday’s IBD. That’s down from No. 22 just six weeks ago. The reason seems to be that many of the stocks in the group are basing after making significant advances. The group has eight companies. Six of them have Composite Ratings of 80 or higher. The top company is O’Reilly Automotive ( ORLY ) with a Composite Rating of 97. It operates 4,571 auto parts stores and is opening more all the time. At an investor conference last August, the company told analysts that total U.S. miles driven is the No. 1 driver in the auto-parts business. That’s been flat at around 3 trillion miles since the financial crisis of 2008, but is starting to grow again as employment has gained. Falling fuel prices are also encouraging more driver to hit the road. As consumer confidence has improved, the size of the U.S. auto fleet has grown and is projected to grow more over the next few years. Even more important, better-engineered cars are lasting longer, resulting in an aging fleet that more often needs a replacement part. “We do not expect the average light vehicle fleet to decrease in the future,” the company said. O’Reilly isn’t the biggest of the auto parts chains — it ranks third behind AutoZone ( AZO ) and Advance Auto Parts ( AAP ) in number of stores — but it is the fastest growing, with a five-year annualized EPS growth rate of 25%. AutoZone has a 17% five-year average EPS growth rate, and Advance has a 15% rate. Each of the chains focuses on both the DYI, or do-it-yourself, market and the DIFM, or do-it-for-me market. AutoZone says the DYI market is a $51 billion-a-year industry that’s grown over the past 10 years at a 2.7% compound annualized growth rate. The DIFM market is $64 billion industry growing at a 2.2% clip. Auto parts chains aren’t the only companies in the industry group. LKQ ( LKQ ) is a company that distributes aftermarket replacement parts to body shops and mechanics. While AutoZone and O’Reilly appear to be in the final stage of forming bases, LKQ broke out of a cup-with-handle base Thursday with a 31.40 buy point. Volume was about one-third above average. It’s seeking to consolidate a fragmented industry by buying local businesses, while growing organically. The company acknowledges that the rise of collision avoidance systems being built into cars will hurt body shop businesses, but argues the effect will take years to come about. Copart ( CPRT ) is another company in the group also growing by acquiring smaller, local players. It conducts salvaged vehicle auctions for insurance companies, charities, dealerships and banks.