Bison Capital Partners (WA:CPAP) VI-A, L.P. has made a significant investment in Motorcar Parts of America Inc. (NASDAQ:MPAA) by purchasing 50,000 shares of common stock. The shares were acquired at a weighted average price of $6.86 per share, totaling approximately $343,000. This transaction, dated November 14, 2024, increases Bison Capital's stake in the company to 320,300 shares.
The shares were bought in multiple transactions with prices ranging from $6.40 to $7.18. Bison Capital Partners VI-A, L.P. is represented by Douglas Trussler on the board of Motorcar Parts of America, highlighting the firm's active involvement in the company's governance.
In other recent news, Motorcar Parts of America reported a record second quarter with sales reaching $208.2 million, marking a 5.9% increase from the previous year. Despite a net loss of $3 million for the quarter, the company reduced its net bank debt and generated $23 million from operating activities. The company is looking forward to improved operating income and gross margins, driven by customer demand and operational efficiencies.
Motorcar Parts of America plans to introduce over 800 new part numbers annually and anticipates over $100 million in diagnostic equipment sales within the next three years. However, the company faced challenges, including a stronger dollar, which led to non-cash foreign exchange losses and a decline in gross margin to 19.8%.
Despite these challenges, the company sees growth in brake-related products and expects to save $7.1 million annually from recent relocations. The company is also optimistic about the second half of the fiscal year, with a focus on efficiency and strong liquidity. These are the latest developments for Motorcar Parts of America.
InvestingPro Insights
Bison Capital Partners VI-A, L.P.'s recent investment in Motorcar Parts of America Inc. (NASDAQ:MPAA) comes at an interesting time for the company. According to InvestingPro data, MPAA's market capitalization stands at $139.36 million, with the stock trading at $7.02 as of the previous close. This price represents a significant discount to the fair value of $14 based on analyst targets, suggesting potential upside for investors like Bison Capital.
InvestingPro Tips highlight that MPAA has experienced a large price uptick over the last six months, with data showing a 34.34% price total return over this period. This aligns with Bison Capital's increased stake, potentially indicating their confidence in the company's future prospects.
However, it's worth noting that MPAA faces some challenges. An InvestingPro Tip points out that the company suffers from weak gross profit margins, which is reflected in the data showing a gross profit margin of 18.3% for the last twelve months. Additionally, MPAA is not currently profitable, with a negative P/E ratio of -1.98.
On a more positive note, analysts predict that the company will be profitable this year, which could explain Bison Capital's investment decision. The company's revenue growth of 5.2% over the last twelve months also suggests some positive momentum.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 6 more InvestingPro Tips available for MPAA, which could provide valuable context for understanding Bison Capital's investment strategy and the company's overall financial health.
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