The Misfits: LKQ Corp. (LKQ)

Finding incredible value in some of the unlikeliest places

Junk yard, Aaron Bohrod, 1939. Oil on fiberboard. (Smithsonian American Art Museum)

My grandfather was a legendary hoarder. I once saw him pick up used dentures from a thrift store. I guess growing up in a Depression-era family with 12 brothers & sisters will lead you to find value in just about everything.

His favorite saying was “one man’s trash is another man’s treasure”. I want to petition the management team at LKQ Corp to make this their slogan.

Since its public offering in 2003, the company’s returns have more than 6x’d the broader market, has more than doubled the total return of Microsoft, and held its own against Google as an investment for much of its publicly-traded existence.

The rather nondescript name can let the imagination run wild. Perhaps most surprising is that the stock that held its own against the world’s tech giants was a glorified scrapyard.

Let’s see what has turned a junkyard dealer into one of the best-performing businesses of the past 20 years.

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