comparing the 3 largest auto parts stores companies
The focus is on corporate fundamentals and financial data, not reviews.
In order to better understand the performance of the auto parts store industry, we need to partially dismantle it one by one and check it for different periods of performance throughout the market.
This is our stock mechanism, I think.
The first thing investors need to consider is the difference between the auto parts store industry and the auto parts industry, just as a mechanic distinguishes between the brands and models he or she is working on.
In short, the auto parts industry belongs to the consumer goods industry, which consists of companies producing auto parts and is the largest auto parts manufacturer in the United States. S.
I have already compared these companies.
Given that the auto parts store industry belongs to the service industry, it consists of retail companies selling auto parts to automakers, dealer service centers, machinery stores, and individual consumers.
The difference between the two industries is very important in analyzing their performance, because during the last recession and during the subsequent recovery, each industry produced very different results.
The different performance of these two industries revolves around the national car sales.
As shown in the following figure, after an average of about 17 million new cars are sold each year ,[orange]
From the beginning of 2007 to the beginning of 2009, this figure plunged 47% in just two years to a low of 9 million per year [red]
After that, the current sales have slowly returned to the normal average of 17 million years (green).
Source: trade economics.
ComNaturally, during the slump in new car sales, we expect a sharp decline in auto parts manufacturing, as shown in the following figure.
At the worst time of sales
From July 2007 to the beginning of March 2009, the broader market S & P 500 index [black]
Fell 56%, SPDR consumer discretionary industry ETF (NYSE: XLY)[blue]
Down 60%, three major U. S. economiesS.
Auto parts manufacturers
Johnson Control(NYSE: JCI)[beige]
BorgWarner Inc. (NYSE: BWA)[purple]
And TRW Motor Holdings. (NYSE: TRW)[orange]-
Down 77%, 68% and 96% respectively.
Three of the largest auto parts store companies --
Aurelie Motor Co. , Ltd. (NASDAQ: ORLY)[beige], AutoZone, Inc. (NYSE: AZO)[purple]
Advanced Auto Parts Co. , Ltd. (NYSE: AAP)[orange]-
The behavior is completely different-9%, +10%, and -
Digital loss, even double. digit gain -
At the same time, most markets, including auto parts manufacturers, are falling hard.
How can we explain the gap between these two auto parts industries?
The best explanation I can think of is that at the time of the worst of the economic crisis, consumers are strapped for money and don\'t spend a lot of money on new cars, and they choose to spend less on repairing existing vehicles.
As a result, as new car sales decline, the demand for new car parts in the car factory has also decreased.
But the demand for parts that retailers already have in stock has increased
Who also sells used parts-
Keep existing vehicles running longer.
The lesson here, of course, is that while the auto parts store industry is still considered an unstable consumer discretion, it is often more defensive --
Than auto parts manufacturers.
The only downside, however, is that the auto parts store\'s more defensive posture in the bull market has hurt them, as we have witnessed since the beginning of the recovery in 2009, as shown in the following figure.
Since the start of the bull market at the beginning of 09, the S & P index has risen by about 205%, and the XLY index has risen by 345%, all three of which are the largest U. S. stock indexes. S.
Auto parts manufacturers beat them up 420%, 650% and 6,700% respectively (
Yes, 67 times)!
At the same time, O\'Reilly, one of the three largest auto parts store companies, performed well in both the market and the industry, while the other two companies, AutoZone and Advance, has landed between the two benchmarks, each up 490%, 290% and 325%, respectively, as shown in the following figure.
Of course, the explanation for this is that, as shown in the first chart, with the increase in car sales and production, the demand of auto manufacturers for new parts from parts manufacturers exceeds that of consumers for parts from retailers.
In addition, auto parts manufacturers have dropped more in the first place and started at a significantly oversold level.
In the long run, compared to the broader market listed below, the auto parts store industry as a whole looks like it will continue to achieve rapid revenue growth, with green indicating better performance than yellow indicating poor performance.
Revenue from the industry is expected to grow by 1 in the next two quarters. 98 to 3.
The average growth rate of S & P is 27 times, and the growth rate of 2015 is 2 times.
Slowed to a more sustainable 1 before 02 times.
63 times a year in the next five years.
Over time, the three largest companies in the industry are expected to split their performance with a little surprise, as shown in the table below.
Throughout the calendar, O\'Reilly is still on track to overtake AutoZone, and Advance looks ready to push revenue growth faster than the once-dominant O\'Reilly.
Compared with the broader market Standard & Poor\'s, although the three companies are not performing well, they will be 1 from 2015. 23 to 1.
It is 90 times the market average.
However, when identifying a company as a potential investment, it is not just revenue growth that should be considered.
Among other indicators, how do these three indicators compare with each other and which one is the best investment?
Let\'s answer this by comparing their company fundamentals in the following format:)
B) financial comparison
Estimates and analyst advice, and c)
Ranking with data sheet.
When we compare each indicator, the company with the best performance will be covered by green shadows, and the company with the worst performance will be covered by yellow shadows, which will be counted in the final ranking later. A)
Financial comparison market value: although the size of the company does not necessarily mean an advantage and therefore does not rank, it is important to compare other financial data to rank as a denominator.
Growth: since there may be a big difference in income and expenses per season, growth is measured over the course of a yearover-
For example, the first quarter of this year compared with the first quarter of the previous year.
In the most recently announced quarter, Advance generated the largest revenue and revenue growth --over-
AutoZone reported the least amount of revenue last year.
Profitability: the company\'s profit margin is very important to determine how much profit the company gets from sales.
Operating profit margin represents the percentage obtained after operating costs (such as labor, materials, and overhead.
Profit margin represents the remaining profit after Operating costs plus all other costs (including debt, interest, taxes and depreciation.
Among our three contestants, AutoZone operates with the widest margin and operating profit, while Advance competes with the narrowest margin and operating profit.
Management Effectiveness: shareholders are very interested in the management\'s ability to do more with what is given to it.
The effectiveness of management is measured by the assets under its control and the return generated by the equity of the shareholder investment company.
For their management performance, AutoZone\'s management team provides maximum returns on the least amount of assets delivered by Advance\'s team.
Since AutoZone\'s return on equity is not available, the indicator is not considered in the comparison, although it is worth noting that both O\'Reilly and Advance generate outstanding return on equity.
Earnings per share: Of all the metrics that measure the company\'s revenue, earnings per share may be the most meaningful for shareholders, as this represents the value that the company has added to the outstanding shares per share.
Due to the different number of tradable shares in different companies, I prefer to convert the earnings per share to the percentage of the current share price to better determine where the investment can get the maximum value.
Of the three companies compared here, AutoZone provides the largest Diluted earnings per share for common stock shareholders, as a percentage of their current share price, while O\'Reilly\'s
Share price value: even if a company is better than its peers on all of the above indicators, investors may still shy away from its stock if its price is already too high.
This is where the stock price is reviewed relative to the forward earnings and the company\'s book value, and where the earnings of the stock price relative to the earnings growth are reviewed, called the hook ratio.
A lower ratio indicates that stock prices are currently trading at a cheaper price than their peers, and therefore may be a transaction.
Of our three fighters, AutoZone\'s stock is the cheapest relative to the forward earnings, while Advance\'s stock is relative to 5-year PEG.
In the case of excessive size, O\'Reilly is the most overvalued relative to income and hook.
Since AutoZone is not available for the price of the company\'s book value, the indicator is not considered in the comparison. B)
Of course, no matter how skilled we think we are in measuring the prospects of stocks as investments, we should at least consider the forecasts of professional analysts and the company itself --
It includes estimated future earnings per share and the growth rate of these earnings, stock price targets, and suggestions for buying and selling.
Revenue estimates: in order to correctly compare future earnings per share estimates for multiple companies, we need to convert them to a percentage of the current price of the stock.
Of our three samples, AutoZone provided the highest percentage of earnings for the quarter, exceeding 2015 of the current share price, while Advance provided the percentage of earnings for the next quarter.
At the low end of the spectrum, O\'Reilly provides a minimum percentage.
Long-term revenue growth:
Term investor, this indicator is one of the most important considerations because it represents the percentage of expected revenue growth or contraction compared to the income of the corresponding period a year ago.
For revenue growth, Advance provides the largest revenue growth for the quarter and the next five years, while O\'Reilly provides revenue growth for the next quarter and 2015.
At the low growth end of the scale, AutoZone provides the slowest growth overall.
Price target: as with the earnings estimate above, in order to correctly compare multiple companies, the company\'s stock price target must also be converted into a percentage of the current price.
For their high, medium and low price targets for the next 12 months, analysts believe that AutoZone\'s stock has the least potential to rise and the most downside risks, while Advance\'s stock has the most potential to rise, o\'Reilly\'s shares fell by the smallest margin.
Buy/sell suggestions: after all, I said and did it again. Maybe one measure to summarize all this is the analyst\'s suggestion.
These have been translated into a percentage of each level recommended by analysts.
However, I only considered strong buy and buy suggestions in the ranking.
Holding, poor performance, and sales advice are not ranked as they are determined after the winner of the strong purchase and purchase category has been identified, and will only negate those that are officially won.
Of our three competitors, O\'Reilly was most popular with seven strong buys and seven, representing a total of 53.
85% of the 26 analysts followed by six purchases and seven buy ratings, accounting for 50% of the 26 analysts, finally, 4 purchases and 5 buy suggestions represent 33
33% of its 27 analysts. C)
RankingsHaving calculated all the numbers and compared all the predictions, and now is the time to summarize the outcome and rank our three competitors.
In the table below, you will find all the data considered above and some other data that has not been reviewed.
Here, the use of the company\'s market value as a denominator begins to play a role, because for a fair comparison, most of the data in the table has been converted into a percentage of the market value.
The companies that rank first and last have shadows.
We then add up the results of each company to determine its overall ranking, the results of the first place are regarded as advantages, and the results of the last one are regarded as disadvantages.
The winner is . . . . . . Completed in advance, performed well on 13 indicators, did not perform well on 5 indicators, net score was 8 points, followed by O\'Reilly, and performed well in 7 indicators, poor performance in 10 indicators, net score-
3. AutoZone is not in the region, performs better than 10 indicators on 10 indicators, performs poorly on 15 indicators, and is net divided-5.
It is expected that the auto parts store industry will be significantly better than the broader market of S & P in 2015 and next quarter, it is expected that all three of the largest companies in the field will lag behind the broader market in the next quarter\'s earnings growth, and then perform well in 2015 and beyond.
However, after considering the fundamentals of all companies, given that its lowest share price is 5-
This year\'s DingTalk, the highest current ratio, the highest market revenue, the highest tracking revenue and revenue growth, the highest future earnings than the current stock price in the next quarter, the highest overall earnings growth, highest and best high average price target and buy advice from most analysts
Competition in auto parts stores.