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JimVanMeerten (61.60)

O'Rielly Automotive in a recession

Recs

1

August 30, 2011 – Comments (0) | RELATED TICKERS: ORLY

Complete Article and Graphs


If I only knew back then what I know now.  Don't you'd think I'd learn that during a recession the consumer who is uncertain about his job puts off buying a new car and facing  60 months of car payments and just decides to fix up the one they've already paid for.  A Barchartcomparison for the weekly price percentage change of O'Reilly Automotive (ORLY) vs. the S & P 500 over the past 3 1/2 years shows why I wished I'd had that hind sight:

What are the factors that have helped the company ride out the recession and what are its prospects for the future?  First let's look at what is happening to the recent price action:
Barchart hourly trading momentum over the last month:

Barchart technical momentum indicators:

1 - Barchart 48% technical buy signal that is strengthening

2 - Trend Spotter buy signal

3 - Above its 20, 50 and 100 day moving averages

4 - 14 new highs and up 7.10% in the last quarter

5 - Relative Strength Index 61.44% and rising

6 - Barchart computes a technical support level at 61.50

7 - Recently traded at 63.98 which is above its 50 day moving average of 62.18

Summary:  O'Reilly Automotive (ORLY) has enjoyed an almost unbroken stream of sales and earnings increases and the consistent price momentum has been a result of that.  O'Reilly stockholders have gotten a 16% annual return over the last 5 years and I'm betting that will continue and investors buying in at this level should enjoy a 14% - 17% total return over the next 5 years.

Jim Van Meerten is a Marketocracy Master

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