AAP
Advance Auto Parts Inc.
Consumer, Industrial/Transportation
11/27/2013
Presented
| Date | 11/22/2013 |
| Price | $100.04 |
| Market Cap | $7.32B |
| Ent Value | $7.36B |
| P/E Ratio | 22.7x |
| Book Value | $27.44 |
| Div Yield | 0.2% |
| Shares O/S | 73.21M |
| Ave Daily Vol | 740,000 |
| Short Int | 3.62% |
Current
| Price | $39.47 |
| Market Cap | $2.36B |
| Advance Auto Parts, Inc., through its subsidiaries, operates as a specialty retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. It operates in two segments, Advance Auto Parts (AAP), and Autopart International (AI). The APP segment operates stores that offer brand name and private label automotive products, including alternators, batteries, belts and hoses, chassis parts, clutches, engines and engine parts, ignition parts, lighting, radiators, starters, spark plugs and wires, transmissions, and water pumps; accessories, such as floor mats, mirrors, vent shades, MP3 and cell phone accessories, and seat and steering wheel covers; chemicals comprising antifreeze, brake and power steering fluids, freon, fuel additives, windshield washer fluids, and car washes and waxes; and oils, such as transmission fluids and other automotive petroleum products for domestic and imported cars and light trucks. This segment also provides battery and wiper installation, battery charging, check engine light reading, electrical system testing, video clinics, loaner tool programs, and oil and battery recycling services. In addition, it sells products online. The AI segment operates stores that offer replacement parts for domestic and imported cars and light trucks. It serves customers in the Northeastern, Mid-Atlantic, and Southeastern regions of the United States; and warehouse distributors and jobbers in North America. As of April 20, 2013, the company operated 3,969 stores in 39 states, Puerto Rico, and the Virgin Islands. It serves do-it-yourself, do-it-for-me, or commercial customers. The company was founded in 1929 and is based in Roanoke, Virginia. |
Highlights
The presenter is long shares of Advance Auto Parts, reasoning that the company will emerge a better overall business following its recent $3 billion acquisition of auto parts and repair chain Carquest. In spite of management’s past perceived shortcomings as capital allocators, the presenter believes this particular deal was highly strategic, increasing the company’s geographic reach as well as its exposure to commercial customers and to the more lucrative do-it-for-me (DIFM) segment.
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