Advance Auto Parts, Inc. (NYSE:AAP)

Fewer new cars beings sold means more parts being sold.

Strangely, despite strong margins, good earnings and a low P/E, I look for this chain to under-perform for a while. The reason? As more and more people convert to more fuel efficient vehicles, they will have to purchase NEW since there are so few gas misers available used. Consequently, I expect less need for parts as the nation's auto fleet becomes less aged during this transition.

good store chain. shoot long.

good

Crushed earnings..will be moving higher from here! Strong Buy!

Summer time is fix up your car time.

My husband is a shade -tree mechanic, buys all of his parts from aap.

it's a winner

Just got a new CEO and I think thing are about to start rolling in a positive direction.

On a strictly technical basis, my magic charts say this will outperform the S&P

Consistenly better than the competition.

Not much growth of earnings in the past two years despite the increased revenue, yet its PE is slightly above the S&P500 average right now. Combine that with small margins and the fact that the cie is not debt-free, it is difficult to see this business outperforming unless management can increase its effectiveness.

Indicators look bleak overall.

Continued growth

Accessories will contribute to an increase in sales and improve profits. In addition, auto and truck useage in the summer travel should drive up repairs requiring parts.

The second largest specialty retailer of automotive parts in the U.S., Advanced Auto Parts (AAP), has been able to enhance its sales by 8.2% during fiscal 2006. Though comparable store sales grew by 2.1%, it’s bit low as compared to 8.7% witnessed in 2005. This dismal performance in comparable sales growth was on account of economic downturns that the country witnessed during 2006. During the period of economic downturn customers would have deferred maintenance of their vehicle. However, it should be noted that the maintenance for vehicle is done out of necessity, rather than by choice. This postponement of repair and maintenance should materialize in the quarters ahead.

AAP’s average sales per store of $1.55 million per store were in line with the industry leading level. Improved procurement costs, a positive shift in sales mix and logistics efficiencies has been reflected in the form of enhanced gross margin. For the fiscal 2007, the company plans to open around 200-210 new stores, which would supplement their guidance of high single digits revenue growth during the coming year. Moreover, the company expects to remodel 150 stores and relocate around 35 of its existing stores.

Factors like rising average age of cars, which currently hovers around 9.5 years, growing population of light trucks and sport utility vehicles, declining trend of new car sales, and the ascendance of total number of miles driven annually to 3 trillion shows a favorable sign for automotive aftermarket industry, and surely will aid Advance Auto Parts to attain its EPS guidance of $2.38 to $2.48, an increase of at least 10%. These favorable industry dynamics coupled with AAP’s continued execution of key business initiatives makes the stock a good buy.

Market placing makes it strong.

Management is controling expenses