Should You Invest in LKQ Corporation (LKQ)?

Aristotle Capital Boston, LLC, an investment advisor, released its fourth-quarter investor letter for “Small Cap Equity Fund”. A copy of the letter can be downloaded here. U.S. small-cap equities reported modest gains in the fourth quarter of 2025. The quarter started as a continuation of the post-Liberation Day risk-on market environment, while it ended on a strong note, driven by a positive macroeconomic backdrop. Attractive valuations, earnings recovery, broadening of the market, and a shift from mega-cap stocks supported small caps in the quarter. The Aristotle Small Cap Equity Fund (Class I-2) returned 1.96% in Q4 2025, trailing the 2.19% total return of the Russell 2000 Index. Security selection supported overall performance, while allocation effects detracted from performance. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Aristotle Small Cap Equity Fund highlighted LKQ Corporation (NASDAQ:LKQ) as a recent addition to its portfolio. LKQ Corporation (NASDAQ:LKQ) is a leading distributor of alternative and specialty auto parts for the repair and maintenance of vehicles and specialty vehicles. On February 13, 2026, LKQ Corporation (NASDAQ:LKQ) stock closed at $34.10 per share. One-month return of LKQ Corporation (NASDAQ:LKQ) was 1.76%, and its shares are down 12.81% over the past twelve months. LKQ Corporation (NASDAQ:LKQ) has a market capitalization of $8.774 billion.

Aristotle Small Cap Equity Fund stated the following regarding LKQ Corporation (NASDAQ:LKQ) in its fourth quarter 2025 investor letter:

"LKQ Corporation (NASDAQ:LKQ) is a North American market leader in alternative collision repair parts with expertise stemming across used, recycled, refurbished, and remanufactured collision repair parts as well as the market for (new) aftermarket collision repair. Overall, we believe the company maintains favorable scale advantages that allow for volume purchase discounts from suppliers and a wider distribution network, higher fill rates, and faster response times relative to competition. Furthermore, the company has made investments in improving its technology and logistics network beyond that of its smaller competitors, which we believe will further cement its market position through technological sophistication."

LKQ Corporation (NASDAQ:LKQ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 49 hedge fund portfolios held LKQ Corporation (NASDAQ:LKQ) at the end of the third quarter, up from 32 in the previous quarter. While we acknowledge the potential of LKQ Corporation (NASDAQ:LKQ) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered LKQ Corporation (NASDAQ:LKQ) and shared a list of best affordable stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.