A professional auto parts manufacturer which specialize in providing OEM/ODM services

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picking an auto part for safety

by:ShenHao     2020-06-15
Trying to find safe investments as U. S.
The continued surge in the stock market always makes investors feel dirty and confused.
Endless questions about why you don\'t make as much money on current hot tech stocks or the latest IPO as everyone else can get your kids excited.
But when the market turns, your stomach won\'t, and your investment account won\'t be emptied.
I \'ve been trying to find another option that, in my ever-expanding stock options, has gone well through the last recession, either with a bright future or with an undervalued current value
My previous two choices were Church & Dwight ($CHD)and Hasbro ($HAS).
There are three auto parts retailers in the United States. S.
Advanced Auto Parts ($APP), Auto Zone ($AZO)
And O\'Reilly motor ($ORLY).
Adding one to your portfolio can increase diversity and some security in good form during the recession.
After verifying their performance in the last recession, which one did the problem turn?
We analyze and compare recent performance, earnings expectations, growth prospects, and other valuations to get the best option.
Established in 1929, advanced auto parts company is an advanced store company.
They are a provider of auto aftermarket accessories for professional installers and individual customers.
They operate stores and branches under the trade names of \"Advanced Auto Parts\", \"self-driving international\", \"Carquest\" and \"Worldpac\", with a total of 4,966 stores and 143 branches
66% of their sales come from parts and batteries, 20% from accessories and chemicals, and 13% from engine maintenance.
Its market value is 11. 8 billion.
Established in 1979, Auto Zone is the leading Auto parts and accessories retailer in the United States.
They are also leading dealers, but not one.
They have 5,618 stores in the United States. S.
Mexico is 564 and Brazil is 20.
Its marke tcap is 24. 5 billion.
O\'Reilly, founded in 1957, is a large professional retailer of parts, tools, equipment and accessories in the US automotive aftermarket.
Unlike premium auto parts and car districts, O\'Reilly does earn revenue from the services offered by their store.
They have 5,219 stores in the United States.
Its market value is 29.
5 billion, the largest market value of the three markets.
The only big difference between the three is O\'Reilly\'s revenue from the service, while the other two companies offer only free services.
Auto Zone has the largest domestic and international stores.
Auto parts retailers are a safe haven in times of economic downturn, as consumers are more inclined to repair used cars than to buy new ones.
This is because debt becomes harder to get and the working environment is not that secure.
This is particularly important given Friday\'s event.
The author created using data from the Ministry of Finance.
First ruling since 2007
The annual yield is already below 3-month yield.
This means that the fixed income market has started a safe flight at 10-
Year of US government bonds.
Since Campbell Harvey\'s initial 1987 paper, the yield curve investment has foreshadowed the collapse of all the recession and related stock markets.
From the perspective of auto parts
Manual retailers were pretty good during the last recession.
From a financial company. yahoo.
The ComThis sector also performed well after the Internet bubble burst, although in the year 00 s, as sales began to move online, the initial Internet stock began to fall when it was hit.
For the three auto parts retailers, it\'s not just the strong performance of price action, but their financial position has performed well in the last recession.
The author creates with 10-data
Throughout the Great Depression, revenue from ksauto Zone, premium auto parts and O\'Reilly Motors grew.
After the recession began, revenue from O\'Reilly and senior auto parts fell only once, but in-4% and -.
1% this is almost hiccups.
In particular, O\'Reilly\'s revenue grew by 65% in 2009, while revenue for senior auto parts grew by 13. 6%.
From a financial company. yahoo.
The author creates using the information in the value eline. Com and finance. yahoo.
ComAll these tables are created using year-end data including price per share.
The three stocks have been very stable in their recent financial performance, leaving little lingering questions about income or earnings.
Advanced Auto Parts have the highest annual earnings in stock prices, but earnings per share in the auto sector are higher than the stock price or price-earnings ratio.
The same is true of the impact of prices on cash flow, in favor of AutoZone.
In the past three years, the gross margin of Advanced Auto Parts has also been much lower than its two competitors, at least 8%.
Comparable store sales growth has been tough for premium auto parts, and O\'Reilly is the winner in this growth category.
AutoZone maintained a positive momentum while the sales of premium auto parts stores grew.
Premium auto parts are the only of the three auto parts with dividends, paying $.
24 shares per share, which has been the same dividend since 2006.
The current payment rate is 3%.
However, given its history of sales growth in comparable stores and its lower gross profit margin, it seems to be the weakest of the three companies.
In 2017, the total size of the entire automotive aftermarket in the United States was $381 billion.
Medium and heavy-duty-
Duty vehicles, without them, only $286 billion in size, are a better representation of our customers in the auto aftermarket accessories store (
Source: Association of Automotive Aftermarket suppliers).
It is also estimated to grow at a rate of 3. 6% to 2020.
The total sales of the three retailers were $29.
24 billion or 10.
22% of the total possible USS. market.
This leaves a lot of room for growth for all three retailers.
O\'Reilly has won store growth, the fastest growing in the past few years.
The number of new stores in AutoZone has steadily increased by 200 each year and has not slowed down.
Last year, AutoZone did sell 26 stores in the sales of IMC and autoany businesses.
The sale resulted in an impairment fee of $193.
2 million General and administrative expenses for internal operation and sales.
This change appears to be due to the carrying of fair value, not to the desire to reduce the number of stores, AutoZone received a sale price offer.
O\'Reilly also expanded at the rate of 200 stores per year, which is consistent with AutoZone\'s expansion target in absolute terms.
In the face of many closures, advanced auto parts have been struggling to maintain the number of their stores.
However, in 2014, the number of new stores was 1,487.
This dramatic increase is the result of a merger with generator procurement and universal parts International.
Given the positive trend of competitors and the increase in the number of stores O\'Reilly has passed this year, this negative trend still does not bode well.
Neither AutoZone nor O\'Reilly have any signs of a slowdown in new store growth, and future sales growth may come from new store sales and same store sales growth until more stores begin to close or move on.
Created by the author using financial data. Yahoo.
The consensus reached by ComThe analysts on the growth of these stocks is positive and has some twists and turns.
2020 analysts believe AutoZone growth will slow.
They believe that advanced auto parts will have the highest growth rate, which reflects their capital expenditures that have helped drive their growth over the last few years compared to their competitors.
Authors complete using data from 10-
In terms of debt, the car zone does have the most debt.
However, their interest coverage is well above the health level of 1.
5 or 2, they reduce debt by 1 year by year. 5%.
O\'Reilly has recently increased their long term.
Between 2017 and 2018, regular debt increased by 15% per cent.
Again, given the nature of their interest coverage, this will not have much impact.
In terms of corporate value over interest, taxes and earnings before depreciation, the Auto Zone is once again the most undervalued of the three.
Due to the current valuation and other comparison indicators, our main choice here is AutoZone.
To better verify the value here, we include a discounted cash flow model.
The author uses the 10-created model
K datawe uses the capital asset pricing model to determine the return on equity and uses the average tax rate for the past two years to adjust the higher tax rate in the future (
Conservative assumptions)
Assuming that the future growth rate is very low, close to 3%, because the expected size of market growth is 3.
Despite recent growth expectations, the growth rate was 6% per cent.
Using these conservative assumptions, our final fair value is still $1343.
$46 per share, up about 35% from the current price of $995. 86.
We believe that the best thing to pick from the package is AutoZone.
Although analysts believe that China\'s economic growth will be lower than other competitors, China\'s current price-earnings ratio, EV/EBITDA, cash flow Price and gross profit margin have given us in the uncertain economic future.
Created by financial authors. Yahoo.
The current price is much higher than the moving average of 50 days and 200 days, which is a good purchase at today\'s price level.
However, if you believe that growth is likely to play a bigger role, you should look at O\'Reilly because they are the leaders of growth in history and do not rely on turnaround strategies such as Advanced Auto Parts.
I will continue to read a series of articles that will continue to show a strong portfolio from top-
Taking into account our current economic situation, look for value through a well
Select stocks by comparison or bottom-up, when hidden value is found in an industry and department that should perform well.
Disclosure: I/we don\'t have a position in any of the stocks mentioned, but may start a long position in AZO within the next 72 hours.
This article was written by myself and expressed my views.
I received no compensation (
In addition to Seeking Alpha).
I have no business relationship with any stock company mentioned in this article.
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