Motorcar Parts of America, Inc. (MPAA) Covered Calls

Motorcar Parts of America, Inc. is a leading remanufacturer and distributor of automotive aftermarket parts. The company specializes in heavy-duty and non-discretionary components, including alternators, starters, wheel hub assemblies, and brake products. Serving major retail and professional channels across North America, the firm focuses on providing cost-effective, high-quality replacement parts for a wide range of light-duty and commercial vehicles.

You can sell covered calls on Motorcar Parts of America, Inc. to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for MPAA (prices last updated Tue 4:16 PM ET):

Want to make money with covered calls?  Sign Up For A Free Trial

Core Business and Products

Motorcar Parts of America, Inc. (NASDAQ: MPAA) is a dominant force in the automotive aftermarket, specializing in the remanufacturing of "non-discretionary" replacement parts. The company’s primary product lines include rotating electrical components (alternators and starters), wheel hub assemblies, and an expanding suite of braking solutions, such as master cylinders and power brake boosters. By focusing on remanufacturing, the firm provides an environmentally sustainable and cost-effective alternative to new "tier-one" parts while maintaining OE-equivalent performance standards.

The company operates a complex global supply chain with manufacturing and remanufacturing facilities in the United States, Mexico, Malaysia, and China. A significant strategic pivot in 2026 involves the aggressive expansion of its diagnostic testing equipment division, which provides specialized tools for both traditional internal combustion engines and the emerging electric vehicle (EV) market. In early 2026, the firm reported record quarterly sales exceeding $180 million, driven by the aging U.S. vehicle fleet and the increasing complexity of modern automotive electrical systems.

Competitive Landscape

The automotive aftermarket is highly competitive and consolidated, with Motorcar Parts of America competing against large diversified industrial firms and specialized remanufacturers. The company’s competitive advantage is rooted in its deep relationships with "big four" auto parts retailers (AutoZone, O’Reilly, Advance, and Genuine Parts) and its ability to manage high-volume core-exchange programs. While the firm faces headwinds from volatile raw material costs and global logistics disruptions, the non-discretionary nature of its products provides a resilient revenue base, as consumers must replace failed starters and alternators regardless of economic conditions.

Publicly traded competitors that are optionable include:

1. O’Reilly Automotive, Inc.: A leading specialty retailer and a primary customer/competitor in the distribution of automotive aftermarket parts.
2. AutoZone, Inc.: The largest retailer of automotive parts in the U.S., serving as both a key partner and a benchmark for aftermarket demand.
3. Genuine Parts Company: A global service organization engaged in the distribution of automotive and industrial replacement parts (NAPA).
4. Standard Motor Products, Inc.: A direct competitor in the manufacturing and distribution of premium automotive replacement parts.

Strategic Outlook and Innovation

The strategic roadmap for 2026 is centered on margin expansion through operational efficiency and the build-out of its "Brake Power" category. The firm is currently consolidating its North American distribution footprint to reduce "last-mile" logistics costs and improve inventory turnover. Management is also prioritizing debt reduction, utilizing increased free cash flow from recent price hikes to strengthen the balance sheet. A key growth pillar remains the firm’s entry into the heavy-duty and agricultural markets, diversifying its revenue away from purely passenger vehicle applications.

Innovation at the firm is increasingly focused on the "EV transition." Motorcar Parts of America is investing heavily in the development of remanufacturing processes for electric motors and high-voltage power electronics. Furthermore, the company’s diagnostic division is launching AI-integrated testing platforms that allow technicians to identify electrical faults more accurately, reducing "no-fault-found" returns. These efforts are intended to ensure the firm remains an essential part of the automotive service infrastructure as the global fleet evolves toward hybrid and fully electric platforms.

Want more examples? MP Covered Calls | MPB Covered Calls