Douglas Trussler, a director at Motorcar Parts of America Inc. (NASDAQ:MPAA), has increased his stake in the company by purchasing 50,000 shares of common stock. The shares were acquired at a weighted average price of $6.86, with the transaction totaling approximately $343,000. This purchase was made through Bison Capital Partners (WA:CPAP) VI, L.P., where Trussler serves as a representative on the board of directors. Following this transaction, Trussler, through Bison Capital, holds a total of 320,300 shares indirectly.
In other recent news, Motorcar Parts of America posted record sales in its fiscal 2025 second quarter, reaching $208.2 million, a 5.9% increase from the previous year. Despite recording a net loss of $3 million for the quarter, the company reduced net bank debt and anticipates improved operating income and gross margins. These are among the latest developments for the company.
The company also generated $23 million in cash from operating activities. Operational efficiencies are expected to be derived from growth in brake-related products and the introduction of new part numbers. The company plans to introduce over 800 new part numbers annually and anticipates over $100 million in diagnostic equipment sales within three years.
On the downside, the company experienced a decline in gross margin to 19.8% and a rise in operating expenses to $28.8 million, partly due to a $5.4 million non-cash foreign exchange loss. The company also incurred $1.3 million in one-time transition expenses and $2.7 million in onboarding expenses for new business. Despite these challenges, Motorcar Parts of America remains optimistic about the second half of the fiscal year.
InvestingPro Insights
The recent insider purchase by Douglas Trussler aligns with several key insights from InvestingPro. Motorcar Parts of America Inc. (NASDAQ:MPAA) has experienced a significant price uptick over the last six months, with InvestingPro data showing a 34.34% price total return in that period. This positive momentum could be a factor in Trussler's decision to increase his stake.
Despite the company not being profitable over the last twelve months, InvestingPro Tips indicate that analysts predict MPAA will be profitable this year. This optimistic outlook might explain the director's confidence in acquiring additional shares. The company's valuation also implies a strong free cash flow yield, according to another InvestingPro Tip, which could be attractive to investors looking for potential value opportunities.
It's worth noting that MPAA's Price to Book ratio stands at 0.5, suggesting the stock might be undervalued relative to its book value. This metric, combined with the insider buying activity, could signal a potential upside for the company's stock price.
For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips for MPAA, providing a deeper understanding of the company's financial health and market position.
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