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Motorcar Parts Zooms Higher

Motorcar Parts of America (MPAA) rallied on Tuesday, pushing near its 52-week high after receiving an upgrade.

Motorcar was upgraded from hold to buy by BB&T Capital Markets on Tuesday. Shares closed at $7.91, up 76 cents or 10.6%. In the past 52 weeks, Motorcar shares have ranged from $4.54 to $7.95, putting the shares up almost 41% in 2010.

In early August, Motorcar posted net income for the fiscal 2011 first quarter of $2.5 million, or 21 cents per diluted share, compared with net income of $1.2 million, or 10 cents per diluted share for the year-ago period.

On Aug. 30, Motorcar announced it made a $1.9 million strategic investment in Fenwick Automotive Products, Toronto, structured as a secured loan with an option to acquire substantial ownership.

"This transaction represents a potential opportunity to expand beyond Motorcar Parts of America's alternator and starter business and leverage our company's existing manufacturing expertise and distribution channels... A major benefit of the transaction is the option to acquire a substantial portion of Fenwick Automotive and likely more than double Motorcar Parts of America's annual revenues with expected accretive earnings," said Selwyn Joffe, chairman, president and CEO of Motorcar.

Motorcar by the Numbers

Company Profile

The Torrance, Calif.-based maker of aftermarket auto starters and alternators was founded in 1968.

Income Statement

Motorcar's gross operating profit has risen steadily the past three years, from $23 million in March 2007, to $44.7 million in March 2010. In the meantime, Motorcar cut its selling, general and administrative expenses from $24.7 million to $21.6 million in the past year.

Balance Sheet

Stock Ratios

Motorcar's P/E ratio based on trailing 12 months earnings is 7.80, compared with 17.20 for the S&P 500.

Analyst Ratings

This article was written by a staff member of TheStreet.

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