Dorman Products: A Dominant U.S. Aftermarket Supplier of (Formerly) Dealer-Exclusive Parts

John Heldman and Dave Hutchison presented their in-depth investment thesis on Dorman Products (DORM) at Wide-Moat Investing Summit 2015.

Dorman Products is a dominant U.S. aftermarket supplier of (formerly) dealer-exclusive parts, founded by Richard and Steven Berman in 1978 (Steve is CEO). The company provides over 57,000 unique parts in 150 categories. 85% of products sold under one of 7 Dorman brands. The company derived 49% of 2014 revenue from leading retailers (Advance Auto Parts, AutoZone, O’Reilly) and 45% from distributors (GPC/Napa, others). Assuming 2018E sales of $1.15 billion, EBITDA margin of 22%, 35 million shares outstanding, and a 13x multiple of EBITDA, the equity would be worth $97 per share.

About the instructor:

John Heldman brings over 28 years of experience to the management of investment portfolios. Prior to founding Triad, he was a Senior Vice President and Portfolio Manager with Neuberger Berman. John has also managed investment portfolios for Deutsche Bank, Scudder Investments and Bank of America, including managing equity funds and serving on the Equity Strategy Committee. He obtained his Bachelor of Science degree in Finance and Master of Business Administration from California State University, Long Beach. John is a CFA charterholder, and a member of CFA Institute and CFA Society Orange County.

Dave Hutchison has twenty years of experience in investment management. Prior to joining Triad, he served as Investment Strategist for Chamberlain Group, directing investment manager research. Dave also founded and managed Hutchison Capital, a registered investment advisor. He holds a Bachelor’s degree in Political Science from Macalester College and a Master of Business Administration from the University of Southern California’s Marshall School of Business. Dave is a CFA charterholder, and a member of CFA Institute and CFA Society Orange County.

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