Automotive Parts Stock Down 31% Draws $16 Million Bet as Earnings Fall 50% Year Over Year

Petrus Trust Company, LTA initiated a new position in LKQ (NASDAQ:LKQ), buying 520,000 shares in the fourth quarter, according to a February 17, 2026, SEC filing.

What happened

According to a SEC filing dated February 17, 2026, Petrus Trust Company established a new 520,000-share position in LKQ during the fourth quarter. The fund reported a quarter-end position in LKQ of $15.70 million, reflecting the purchase and any price changes during the period.

What else to know

• LKQ now accounts for 1.59% of Petrus Trust’s reportable 13F assets.
• Top holdings after the filing:
  • NYSEMKT:SPY: $216.39 million (21.9% of AUM)
  • NASDAQ:MSFT: $72.48 million (7.3% of AUM)
  • NYSE:CPAY: $71.38 million (7.2% of AUM)
  • NASDAQ:AMZN: $70.99 million (7.2% of AUM)
  • NYSE:AON: $50.81 million (5.1% of AUM)
• As of Friday, LKQ shares were priced at $28.11, down about 31% over the past year and well underperforming the S&P 500’s roughly 16% gain in the same period.

Company overview

Metric	Value
Price (as of Friday)	$28.11
Market capitalization	$7.2 billion
Revenue (TTM)	$13.96 billion
Net income (TTM)	$607.00 million

Company snapshot

• LKQ distributes automotive replacement parts, components, and systems, including body panels, bumpers, glass, mechanical parts, and specialty products for vehicles and recreational vehicles.
• The company operates a distribution-driven business model, sourcing and supplying new and recycled parts to the automotive aftermarket across North America and Europe.
• It serves collision and mechanical repair shops, new and used car dealerships, and retail customers in the United States, Canada, and multiple European markets.

LKQ Corporation is a leading distributor of automotive replacement parts and related products, with a global footprint spanning North America and Europe. The company leverages an extensive supply chain and distribution network to deliver a broad assortment of new and recycled automotive parts. LKQ's scale, multi-segment operations, and diverse customer base provide resilience and a competitive advantage in the automotive aftermarket sector.

What this transaction means for investors

LKQ is still generating significant cash, but the market seems focused almost entirely on near-term earnings pressure, and the company’s latest results show the tension clearly. Revenue in the fourth quarter edged higher to $3.3 billion, up from $3.2 billion a year earlier, but profitability took a hit, with net income falling to $75 million and diluted EPS dropping to $0.29, down 50% year over year. At the same time, the business continued to produce strong cash flow, generating about $1.1 billion in operating cash flow and $847 million in free cash flow for the full year.

That puts the spotlight on earnings, and management is seemingly doing its part, having responded with cost actions expected to deliver more than $50 million in annual savings, more than half expected to be realized this year, and it’s also exploring strategic alternatives to create value.

Within a portfolio still anchored by megacap tech and index exposure, this position adds a different kind of lever: steady aftermarket demand, pricing power over time, and meaningful capital return. Now the question is whether margin pressure is temporary or structural.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends Corpay and LKQ. The Motley Fool has a disclosure policy.