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By Gene G. Marcial Standard Motor Products (SMP
) is in a humdrum business: replacement car parts. But the stock action is exciting. Since November, shares have leaped from 9 to nearly 15 despite a lack of Street support. Of the big firms, only Goldman Sachs (GS
) follows it: Goldman did a stock offering for Standard last year, at 10. But now it rates the stock "underperform," based on earnings and long-term prospects.
Some pros disagree. Rodney Hathaway, who heads Heart-land Value Plus Fund, which owns shares, is upbeat on Standard and sees it hitting 25 in a year. And Mario Gabelli, whose mutual-fund group owns 14%, foresees big earnings gains. Standard makes ignition and emission-control systems, onboard computers, and air-and-heating units. Its big rivals -- Delphi (DPH
) and Visteon (VC
) -- supply General Motors (GM
) and Ford Motor (F
), respectively, for both new cars and the aftermarket. But their contracts are up for renewal, so Hathaway sees Standard snatching part of the GM-Ford aftermarket business. Why? Its costs are low (with nonunion labor), and it can make parts in small batches. Hathaway figures Standard can up sales by $50 million in each of the next three years. Longer term, he says this new business could lift the total a further 8% to 10%. He sees earnings (without any GM-Ford business) of $1.05 on sales of $830 million in 2004; $1.70 on $845 million in 2005; and $2 on $875 million in 2006 -- way above 2003's 1 cents, on $678 million.Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. See Gene on Fridays at 1:20 p.m. EST on CNNfn's The Money Gang.