Comparing LKQ (NASDAQ:LKQ) & 707 Cayman (NASDAQ:JEM)

707 Cayman (NASDAQ:JEM) and LKQ (NASDAQ:LKQ) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.

Earnings and Valuation

This table compares 707 Cayman and LKQ”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
707 Cayman	$13.74 million	0.24	-$5.26 million	N/A	N/A
LKQ	$13.65 billion	0.42	$607.00 million	$1.80	12.47

LKQ has higher revenue and earnings than 707 Cayman.

Insider and Institutional Ownership

95.6% of LKQ shares are owned by institutional investors. 0.4% of LKQ shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for 707 Cayman and LKQ, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
707 Cayman	1	0	0	0	1.00
LKQ	0	3	3	0	2.50

LKQ has a consensus price target of $33.25, suggesting a potential upside of 48.11%. Given LKQ’s stronger consensus rating and higher possible upside, analysts plainly believe LKQ is more favorable than 707 Cayman.

Profitability

This table compares 707 Cayman and LKQ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
707 Cayman	N/A	N/A	N/A
LKQ	3.37%	10.84%	4.64%

Risk and Volatility

707 Cayman has a beta of -3.38, indicating that its stock price is 438% less volatile than the S&P 500. Comparatively, LKQ has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Summary

LKQ beats 707 Cayman on 12 of the 12 factors compared between the two stocks.

About 707 Cayman

We are a Hong Kong-based company that sells quality apparel products and provides supply chain management total solutions to our customers spanning from Western Europe, North America to the Middle East. We were founded in 2021 and became wholly-owned by Mr. Cheung, executive director and chief executive officer, in May 2022 and have grown, in a short period of time, building relationships with a diverse range of customers. Our customers include mid-size brand owners and apparel companies that have comprehensive operations with private labels that are sold worldwide. Our Growth Strategies We plan to grow our business in the following ways: (i) build on our core business of selling quality apparel products and offering supply chain management total solutions to our customers; (ii) to expand into developing and selling our own brand of quality apparel products to retail customers in Hong Kong; and (iii) to distribute our customers’ apparel products on our sales platforms in Hong Kong, primarily online and through social media platforms with minimal brick-and-mortar stores. To execute this distribution, we plan to offer live streams of our apparel products through social media platforms and customers can place orders for them through our website, mobile app, social media accounts or brick-and-mortar store(s) at a discount for a short preview period after the live stream. To implement our business growth, we plan to (i) expand our product development department, merchandising department and logistics department; (ii) set up a sales and marketing department and an information technology department; (iii) hire our own team of inhouse designers to support our product development department; (iv) acquire state-of-the-art computer aided design software and tools for use by our designers; (v) expand our warehouse; (vi) revamp our current website and build a new mobile app; (vii) upgrade our enterprise resource planning (“ERP”) system, to cater for this new business; (viii) set up at least one brick-and-mortar store in a densely populated mixed commercial and residential district in Hong Kong which can be accessed conveniently by public transport as well; (ix) expand overseas if this business model proves successful; and (x) acquire the rights from more labels to distribute their apparel products on our sales platforms. Our administrative office is located in Kowloon, Hong Kong.

About LKQ

LKQ Corporation engages in the distribution of replacement parts, components, and systems used in the repair and maintenance of vehicles and specialty vehicle aftermarket products and accessories. It operates through four segments: Wholesale-North America, Europe, Specialty, and Self Service. The company distributes bumper covers, automotive body panels, and lights, as well as mechanical automotive parts and accessories; salvage products, including mechanical and collision parts comprising engines; transmissions; door assemblies; sheet metal products, such as trunk lids, fenders, and hoods; lights and bumper assemblies; scrap metal and other materials to metals recyclers; and brake pads, discs and sensors, clutches, steering and suspension products, filters, and oil and automotive fluids, as well as electrical products, including spark plugs and batteries. In addition, the company distributes recreational vehicle appliances and air conditioners, towing hitches, truck bed covers, vehicle protection products, marine electronics, cargo management products, wheels, tires, and suspension products. It serves collision and mechanical repair shops, and new and used car dealerships, as well as retail customers. The company operates in the United States, Canada, the United Kingdom, Germany, Belgium, the Netherlands, Luxembourg, Italy, the Czech Republic, Austria, Poland, Slovakia, Taiwan, and other European countries. LKQ Corporation was incorporated in 1998 and is headquartered in Chicago, Illinois.