O Reilly Auto Parts
December 12, 2010 by staff
O Reilly Auto Parts, (AP) – Auto parts retailers have exploded over the last two years Americans tired of the recession still old cars and postponed purchases of new cars. But sellers of parts could be ready to demote the midst of soaring sales of cars and a spreading economic recovery.
Large chain parts store recorded impressive sales and earnings growth since the downturn began in late 2007. Investors have snapped up stocks, research activities that benefit from long-term unemployment and economic uncertainty.
The result: double or price increases to three figures for the shares of retailers such as AutoZone Inc., Advance Auto Parts Inc. and O’Reilly Automotive Inc.
The average age of the fleet of the United States has risen to just over 10 years, and the typical car has 125,000 to 155,000 miles on it, according to Paul Taylor, chief economist for the National Automobile Dealers Association.
However, it begins to change. New car sales improved in October and November, prices of used cars have increased and some consumers feel pretty confident about the economy to buy a new car. Others are replacing older vehicles in need. The new vehicles are either repaired under warranty by a dealer, or they need fewer spare parts because they are more reliable.
This has led investors to wonder if there is a lot upside left for parts retailers.
Consider the reactions to two companies that have reported strong quarterly financial results this week:
Pep Boys-Manny, Moe & Jack said Monday that its net profit in the third quarter more than doubled as it expanded its footprint and boost sales in existing stores.
Pep Boys shares jumped Tuesday of 61 cents, or 4.7 percent, to close at 13.57 after reaching a high of 52 weeks and 14 at the beginning of the session.
AutoZone Inc. has not as well. The company said Tuesday that net income rose 20 percent during the quarter ended Nov. 20, marking its eighth consecutive quarter of 20 percent growth in earnings per share. Revenues rose 13 percent to 1.79 billion.
However, investors mostly abandoned AutoZone shares after a peak at the beginning. His actions and slipped 1.76 to $ 260.15. They traded as high and 271.27, also a 52-week high earlier in the day.
A possible reason for the difference: Joseph Morgananlyst Jeffrey Blaeser reiterated a “buy” rating on Pep Boys’ stock, citing a price target and 15
Shares of Advance Auto Parts Inc. fell $ 1.34 to 67.20 and.
O’Reilly Automotive Inc. shares eased down 64 cents at $ 60.54.
The shares of U.S. Auto Parts Network Inc. traded up 12 cents to 8.40 and.
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