Why did the Bapcor share price outpace the ASX 200 on Tuesday?

The Bapcor Ltd (ASX: BAP) share price outperformed the S&P/ASX 200 Index (ASX: XJO) on Tuesday. At the end of the day, Bapcor shares finished at $6.71 each, 1.36% higher.  

Bapcor outperformed the S&P/ASX 200 Index (ASX: XJO) by 1.29% today.

Bapcor is a car parts, accessories, and services provider operating the Autobarn, Autopro, and Burson chains across Australia, New Zealand, and Thailand.

New CEO locked in but is it the right decision?

Since the acrimonious departure of the former CEO and Managing Director Darryl Abotomey in December 2021, the Bapcor share price has fallen by 3%. 

Bapcor’s then CFO Noel Meehan was appointed as Acting CEO. Today, Bapcor announced the appointment of Meehan as CEO and managing director effective from 1 September 2022.

Bapcor chair, Margaret Haseltine said in today’s release:

The Board has observed Noel in the role of CEO since 8 February 2022 and during this, he has secured the engagement of new key executives and has shown strong leadership by establishing a clear vision and strategic direction for Bapcor.

Appointing an internal candidate can foster confidence across the management team and potentially offers a smooth transition given Meehan’s prior experience. However, Meehan only came onboard as CFO in July 2020 and does not appear to possess industry experience based on his profile on the company website. 

I think it’s prudent to monitor Meehan’s execution of the strategic objectives, which centre around growing the network, capitalising on operational efficiencies, expanding the product range, and penetrating the Asia market as outlined in the HY22 results announcement.

Furthermore, the Bapcor FY21 annual report shows Meehan only held a small parcel of Bapcor shares in the company. Further details of Meehan’s remuneration package will hopefully shed light on the strength of alignment with shareholders. 

Could the reshuffle present an investment opportunity?

Meehan’s formal appointment as CEO coincides with the retirement of Therese Ryan as an independent non-executive director effective from 30 September 2022. 

Ryan has been a director since 2014, so her departure could be viewed by some as leaving an experience gap on the board. For reference, the Bapcor share price has increased around 246% since 2014.

Bapcor is undergoing an unusual level of personnel turnover at the higher ranks. This could provide investment opportunities as the market may view such events in a negative light. However, new management and directors could provide a much-needed breath of fresh air and direction. 

One way to evaluate whether Bapcor has the right leaders to steer the ship is to closely monitor key milestones against what management has promised. 

So, make sure to keep your eyes peeled for Motley Fool’s coverage of Bapcor’s financial year-end results. 

The post Why did the Bapcor share price outpace the ASX 200 on Tuesday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Raymond Jang has no position in any of the stocks mentioned. 

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