| Stock (Symbol) | Stock Price | |
O’Reilly Automotive (ORLY) |
$150 |
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| Data is as of | Expected to Report | Sector |
August 1, 2014 |
Oct 21 – Oct 27 |
Food & Necessities |
| Sharek’s Take | ||
 O’Reilly Automotive (ORLY) has a lot of good things going for it. I think its a company that can be a high-teens grower long-term through a combination of new locations (it has around 4000 stores and opens around 200 a year), acquiring other auto parts chains, and stock buybacks ($300 million last qtr). Profit margins are also at all-time highs. That combination should keep profits growing around 18% a year. The problem I have is I feel the stock market is highly valued right now, and I may need to sell some stuff to build cash, to have money to buy stocks during a correction. My analysis shows ORLY has 20% upside to its 2015 Fair Value. So, is 20% enough to hold this stock? |
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| One-Year Chart | ||
 Last quarter the stock was $150 too. I didn’t sell and the stock didn’t go up. It’s still $150. Notice the Est. LTG is 16%, if profit growth slows to that level then 21 times earnings is high for this stock, and the P/E will likely fall a bit. So we could hold ORLY another year and still could be $150. |
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| Earnings Table | ||
 Profits increased a robust 21% last quarter considering sales growth was 8%. Sale store sales increased 5% another good number.ORLY beat the street by 6 cents last qtr, solid beat. Annual Profit Estimates continue to increase. Quarterly profit estimates look good, and these are increasing, so ORLY could continue to grow 20% for the forseeable future. This Earnings Table is solid. |
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| Fair Value | ||
 ORLY is selling at 21 times earnings. Notice how that’s the high point in the last ten-years. Upside is 20% for 2015, but that assumes a 22 P/E. This is a optomistic view of ORLY, if the company stops firing on all cylinders this valuation will be hard to attain. |
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| Ten-Year Chart | ||
 Ten year chart looks very good. 21% grower on 22% profit growth. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
24 of 25 |
O’Reilly Automotive is a good, solid stock that continues to click on all cylinders, but its close to fair value now. I may sell the stock if the market corrects to build cash, or if I find another stock that I want to buy which is growing faster. Right now, ORLY is ranked 24th in the 25 stock Growth Portfolio Power Rankings. I may push it higher as earnings season progresses. ORLY is not in the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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