OvervaluedI recently looked at AutoCanada as a potential investment. The financials are interesting especially when you look at where a dealership makes its money. Take a look at the components of gross profit from the June 30th quarterly report New car sales- $23.8 Mill Used Vehicle Sales-$6.5 mill Parts and Service-$23.3 mill Finance and Insurance- $24.3 mill The scary thing is what happens to profitability if car sales slow down. Finance and insurance has margins of 90% and are a direct function of new car sales. So if sales slow down, new car sales revenues shrink along with the finance and insurance revenues. This company is very highly leveraged to new car sales. How much better can car sales be in Western Canada than the current boom we have seen? Very scary when sales slow down as the multiple investors will pay for this company will compress and the stock will continue to fall sharply. We've seen how quickly this stock can drop from $90 to $55. Due your own due diligence.