| Stock (Symbol) | Stock Price | |
O’Reilly Automotive (ORLY) |
$254 |
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| Data is as of | Expected to Report | Sector |
August 17, 2015 |
Oct 20 – Oct 26 |
Food & Necessities |
| Sharek’s Take | ||
 O’Reilly Automotive is clicking on all cylinders and the stock is responding. The company has been putting out +20% profit growth thorough a diversified combination of (1) increasing store count by 5% per year (2) buying back shares (3) same store sales growth of 5% or more the past 7 qtrs. As mentioned last qtr, ORLY’s share count fell from 140 million to 100 million from 2011-2014 as management bought back stock with excess cash. It spent $220 million buying back stock just last qtr. Also, ORLY’s beaten the street every quarter since Fall 2011 and even then it still hit estimates. Low gas prices are good for drivers, who have responded by driving 3.4% more miles than they did a year ago (through May). More miles mean more auto parts. Looking further out, ORLY expects to grow its store count by 40% in the US and expand into Canada and Mexico. It has acquired other chains to expand in the past, then gone into the stores and improved sales and profit margins. The only issue with ORLY is it’s Fairly Valued at this price. |
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| One-Year Chart | ||
 Fantastic move the stock’s made, as investors see the quality here and have pushed up ORLY stock. But a P/E of 29 is compared to the Est. LTG of 16% per year (I think this is a 18% grower). ORLY has been beating the street, and will likely put out another qtr of 20% growth next qtr. |
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| Earnings Table | ||
 Sales increased 10% last qtr and management took that and increased profits by 26%. Astounding.ORLY beat the street by a solid 14 cents last qtr, and has been beating by a lot each qtr lately. Annual Profit Estimates continue to climb. Quarterly profit estimates show teens profit growth ahead, as they usually do. |
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| Fair Value | ||
 The stock’s P/E ratio has gotten high this year. Some of this is because profits are growing faster than 20%. As I have been mentioning for a while now, this stock has limited upside because the P/E is high. |
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| Ten-Year Chart | ||
 Stock has been fantastic this decade, but looks to have gone too high the last year and is due for a correction. The stock market is in the midst of a steep decline right now, and perhaps 25x earnings would be a bottom, which is $223. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
19 of 23 |
O’Reilly Automotive is clicking on all cylinders and is very timely right now. Management runs an efficient ship and is growing the right way. The only negative is ORLY is fairly valued at this point, and if you don’t own it I would wait for a pullback to get in. ORLY is ranked 19th of 23 stocks in the Growth Portfolio Power Rankings. The stock doesn’t have the upside for the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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