Advance Auto Parts, Inc. (NYSE:AAP)

CAPS Rating: 4 out of 5

The Company primarily operates within the United States automotive aftermarket industry, which includes replacement parts, accessories, maintenance items, batteries and automotive chemicals for cars and light trucks.

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Member Avatar zharriott (60.16) Submitted: 8/12/2014 1:09:04 PM : Outperform Start Price: $124.36 AAP Score: +6.02

Trading at a high price but they'll likely outperform in the distant future.

After four consecutive quarters of yoy sales, auto demand is finally starting to flatten out. Sales were up 9% in July which fell short of the 11% expectation by industry analysts. This slight decline would normally prove beneficial to AAP, as new cars are covered by manufacturer warranties.

However, auto sales are still strong which should lead to a decrease in average vehicle age over the next five or so years. IHS forecasts a 32% increase in new to 5 year old vehicles on the road, and also forecasts a 11% decline of 6-11 year old vehicles. This forecast is the direct result of consumers taking advantage of attractive credit offerings and discounts from auto retailers (average discount from retailers in 2013 was $3000, $3,900 from Ford).

Despite the projected decline in average vehicle age, the distant future is bright for AAP. Vehicle quality is also on the rise which is currently increasing the price auto makers are able to charge for products. I believe in the future auto part stores will be able to increase margins as they charge for premium products. Consumers who are purchasing auto-related products either must purchase for the sake of running their car efficiently, or will choose to purchase these expensive products as discretionary income allows them to in healthy markets. I also believe the increase in car quality will lead to consumers owning the same car for MUCH longer than the average time held now which will significantly increase the average vehicle age on roads in future markets.

Also, commercial delivery and the acquisition of GPI are both smart moves and showed their benefit in the last quarter earnings report where sales were up 47% and earnings were up 21% yoy.

Despite trading at somewhat of a premium (ttm PE = 20, 5yr avg = 15.8) I think there is some room for growth in the distant future. We will likely see a pull back over the next three years as they fully digest GPI, their new debt obligations, and as auto part retailers experience some headwinds from increasing auto sales. However, this is a long haul play and will see significant growth later. Don't miss it!

Outperform - 5+ years

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Member Avatar TMFTycoon (37.88) Submitted: 3/7/2014 2:56:29 PM : Outperform Start Price: $126.88 AAP Score: +0.77

Advance Auto Parts is picking up market share and utilizing its online services to make things easier than ever for its customers. As cars last longer, people will be doing more upkeep and more of it in their own garages.

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Member Avatar KingLobster (46.72) Submitted: 8/27/2013 9:44:58 PM : Outperform Start Price: $81.22 AAP Score: +44.72

A strong company that consistently beats earnings estimates.

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Member Avatar Teacherman333 (49.74) Submitted: 7/25/2013 1:43:12 PM : Outperform Start Price: $85.00 AAP Score: +37.26

For reference point and to allow for comments by others. As of the end of April, 2013.

ROE 33.43%
Trailing PE 16.11
PB 4.70
Div yield 0.30%

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Member Avatar TMF42 (96.13) Submitted: 5/13/2013 9:48:04 AM : Outperform Start Price: $83.77 AAP Score: +39.47

Advance has been a perennial underperformer for no good reason. Relatively new management is finally focused on becoming a better operator -- the company is focused on cutting costs and building the infrastructure to compete better in the commercial market. As the fourth largest player in a highly fragmented market, AAP could could be acquired by a larger player or simply keep growing at the expense of smaller competitors.

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Member Avatar llardito (< 20) Submitted: 4/11/2013 11:23:06 AM : Underperform Start Price: $82.08 AAP Score: -40.16

Chart is not strong, volatile big swings.

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Member Avatar jccperry122 (55.18) Submitted: 1/17/2013 12:27:14 PM : Outperform Start Price: $73.80 AAP Score: +48.92

I believe more people will buy used cars and naturely will need parts fr om different sources

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Member Avatar TrojanFan (26.02) Submitted: 6/27/2012 10:49:41 PM : Underperform Start Price: $64.40 AAP Score: -59.70

Sector call on DIY auto part retailers dealing in after market parts. I'm expecting the sector to underperform expectations in the near term as the fleet age adjusts from abnormally long replacement cycles to more "normative" historical patterns.

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Member Avatar ayaghsizian (97.76) Submitted: 5/17/2012 9:53:09 AM : Outperform Start Price: $69.13 AAP Score: +45.51

growing great, will rebound, i bought 69 shares this morning

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Member Avatar rustam5 (74.71) Submitted: 4/11/2012 9:07:53 AM : Outperform Start Price: $88.13 AAP Score: +8.56

sup

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Member Avatar KimLanners (< 20) Submitted: 1/4/2012 2:05:59 PM : Outperform Start Price: $70.25 AAP Score: +36.66

autowhitetridmic

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Member Avatar ajay711 (< 20) Submitted: 11/30/2011 11:16:36 PM : Outperform Start Price: $68.40 AAP Score: +38.42

AAP has strategies in place to gain market share and solidify their position in the industry.

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Member Avatar teknologic (< 20) Submitted: 4/1/2011 4:37:00 PM : Outperform Start Price: $63.89 AAP Score: +58.56

1x - 4/1

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Member Avatar zaqzaq (84.73) Submitted: 5/30/2010 12:29:57 AM : Outperform Start Price: $51.03 AAP Score: +81.53

New high list dictates all educated investing.

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Member Avatar rathrbsrfng (54.08) Submitted: 5/20/2010 10:04:13 AM : Outperform Start Price: $49.52 AAP Score: +90.98

Trucking up while everyone else is down

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Member Avatar suckabee (78.70) Submitted: 1/13/2010 12:41:23 PM : Outperform Start Price: $39.43 AAP Score: +169.36

Trading well below fair value.

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Member Avatar mtinvest (90.01) Submitted: 10/22/2009 6:08:49 PM : Outperform Start Price: $39.49 AAP Score: +156.08

The ROE has been slightly higher than 20% for the past five years. They have more than 3000 stores in 40 states. There is still room for expansion, if you ask us.

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Member Avatar fewdew (< 20) Submitted: 10/16/2009 2:04:40 PM : Outperform Start Price: $39.00 AAP Score: +164.07

Advance Auto Parts, Inc. (AAP) will continue to do well amid record unemployment, and consumer credit pains. Demand for auto parts will only increase.

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Member Avatar 82882 (61.96) Submitted: 10/14/2009 4:21:59 PM : Outperform Start Price: $38.35 AAP Score: +169.94

It's all about the economy and familys economizing. That is, not buying new cars that they might have in a more stable economy.

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Member Avatar CMAndersonJr (86.41) Submitted: 4/15/2009 9:27:12 AM : Outperform Start Price: $39.71 AAP Score: +100.92

This is the only place I get my auto parts. Great company and knowledgeable workers.

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