The Misfits: Rush Enterprises (RUSHA)

A unique wealth creator in an already unique niche of the stock market.

Les roulottes, campement de bohémiens (Encampment of Gypsies with Caravans). Vincent van Gogh, 1888, oil on canvas (Musee d-Orsay)

I've often professed my love for distributors. It’s a great business, and distributors with high-margin service departments are even better.

Auto dealerships have a lot in common with service-heavy distributors. They aggregate supply from multiple manufacturers to a single point of sale, and customers can choose what they want. The difference here is that auto dealerships don’t often have customers coming to them every year for multiple-vehicle purchases.

Unless it’s a commercial vehicle dealer…

Rush Enterprises (NASDAQ: RUSHA) is North America’s largest dealer network of heavy-duty and commercial vehicles. Since going public, it has posted returns that would make almost any investor envious.

Rush has lots of qualities long-term investors absolutely want to see: A durable business, a founding family with large ownership, and a penchant for shareholder value creation via dividends and buybacks. At the same time, we’re on the precipice of a tectonic shift in the commercial and heavy-duty truck market. It could either lead to many dealerships withering on the vine, or present an opporunity if dealerhsips play their cards right.

Let’s dig in…

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