Auto dealerships have been greatly aided by shortages of parts this year. AutoNation, Inc. (NYSE 🙂 saw a rise in the number of people buying secondhand cars and spare parts. This year, the stock saw strong share gains and revenue growth. As AN continues to be undervalued there are still many upsides for investors.AutoNation, Inc. (AN)The largest American automotive dealer, with more than 230 locations and more than 300 locations including collision centers, is AN. AN owns eight AutoNation USA used vehicle stores, four auction websites, and more than 50 collision centers in 16 states. However, AN is based primarily within the Sunbelt metro areas.

This company has just reported its sixth consecutive quarter of record earnings. Due to the higher than expected profits from new and second-hand vehicles, earnings jumped 115% year-over year. The chip shortage has led to dealers enjoying strong pricing power and low inventories.

Management is confident that demand will outstrip supply throughout next year. The upside of recent inflation is that people who trade in their vehicles enjoy a lot more than they expected. Accordingly, inflation won’t be a factor in consumers purchasing more automobiles by 2022.

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