$LKQ — LKQ Corporation (NASDAQ:LKQ) August 27, 2025.LKQ CorporationBATS:LKQSergioRichiLKQ #LKQ — LKQ Corporation (NASDAQ:LKQ) Investment Analysis Report | Consumer Cyclical | Auto Parts | USA | NASDAQ | August 27, 2025. Executive Summary LKQ Corporation (NASDAQ: LKQ), a leading provider of alternative and specialty automotive parts, has seen notable insider buying activity in late August 2025, underscoring potential undervaluation amid a sector-wide slowdown. On August 27, 2025, Director Andrew C. Clarke purchased 5,000 shares at $31.95 per share (total value $159,773), increasing his holdings to 21,172 shares. Concurrently, President and CEO Justin L. Jude acquired 5,686 shares at $31.50 per share (total value $178,574), boosting his stake to 286,446 shares. These open-market buys follow a pattern of executive confidence, contrasting with prior sales by former directors. Technical indicators point to a high-probability rebound from oversold conditions, with the stock at $32.08 exhibiting a potential bottoming formation on both daily and weekly charts, supported by stabilizing RSI and volume upticks. Q2 2025 earnings revealed revenue of $3.6 billion (down 1.9% YoY) but a slight net income increase, with strategic divestitures like the $410 million sale of the Self Service segment (announced August 26, 2025) aimed at simplifying operations and strengthening the balance sheet. The auto parts sector faces headwinds from U.S. tariffs and sluggish demand, with projected 2025 U.S. vehicle sales declining 4-7%, yet LKQ's focus on aftermarket parts positions it for resilience. Replicating the insiders' average entry at ~$31.73 suggests 20-50% upside potential over 3-6 months, targeting $38-$48, driven by divestiture proceeds and potential margin expansion. With Zacks Rank equivalent to Buy and institutional accumulation, we rate LKQ as a moderate-conviction long, recommending 1-3% allocation for value-oriented portfolios amid cyclical risks. Company Profile LKQ Corporation is a global distributor of vehicle products, including replacement parts, components, and systems used in the repair and maintenance of vehicles. Operating through segments like Wholesale-North America, Wholesale-Europe, and Specialty, LKQ serves collision and mechanical repair shops, dealerships, and individual consumers via an extensive network of salvage yards and warehouses. The company emphasizes sustainability through recycled and remanufactured parts, capitalizing on the growing aftermarket demand. Key financial metrics as of August 27, 2025: • Market Capitalization: $8.25 billion • Enterprise Value: $13.91 billion (approx.) • Earnings Date: 10/23/2025 • Put Call Ration: 0.03 • Put Volume: 20.00 • Call Volume: 718.00 • Insider Ownership: 0.69% • Institutional Ownership: 106.51% LKQ's strategy includes bolt-on acquisitions and operational efficiencies, with recent divestitures streamlining focus on core wholesale operations in a $300 billion global auto parts market. Charts: • (1D) • (5D) Insider Trades: LKQ Ownership: SEC From 4: https://www.sec.gov/Archives/edgar/data/1065696/000121465925012892/xslF345X05/marketforms-70438.xml https://www.sec.gov/Archives/edgar/data/1065696/000121465925012893/xslF345X05/marketforms-70448.xml Insider Trading Context Insider purchases in cyclical sectors like auto parts often signal undervaluation and anticipated recovery, particularly when executed by board members and executives with operational oversight. The August 27, 2025, buys by Director Andrew C. Clarke (5,000 shares at $31.95) and President/CEO Justin L. Jude (5,686 shares at $31.50) total over $338,000 in value, occurring near multi-month lows and post-Q2 earnings. Clarke's transaction marks his first buy in 2025, while Jude's adds to prior accumulations. This activity contrasts with earlier proposed sales by former Director Dominick P. Zarcone (e.g., 15,000 shares at $39.87 in June 2025), shifting net insider sentiment to positive. Year-to-date, insiders have net bought ~18,386 shares, valued at ~$638,464, excluding grants. Such clustered executive buying, especially post-divestiture announcements, suggests insiders view the current price as attractive, potentially anticipating margin improvements from the $410 million Self Service sale proceeds, which will reduce debt and fund growth. Historically, similar patterns in auto parts stocks yield 15-25% outperformance over six months. ➖➖➖ Technical Analysis The daily chart for LKQ illustrates a bearish-to-neutral transition, with price declining from $45 highs in April 2025 to $32.08 amid sector pressures, but showing early reversal signs for a high-probability (70-80%) short-term bounce. A descending channel dominates, with lower highs/lows, but recent candles form a potential double bottom near $30.50-$31.50, supported by a hammer on August 27 with 1.73 million volume—20% above average—indicating buying interest. Key indicators: • Moving Averages: Price below 20-day SMA ($30.59), 50-day SMA ($34.25), and 200-day SMA ($38.21), confirming downtrend; however, the 20-day is flattening, and a crossover above could signal reversal. • Relative Strength Index (RSI, 14-period): At 50.11 (neutral), up from oversold