AAP (Update)

Advance Auto Parts Inc

Consumer, Industrial/Transportation


Presented:11/24/2015
Price:$163.19
Cap:$12.04B
Current Price:$39.47
Cap:$2.36B

Presented

Date11/24/2015
Price$163.19
Market Cap$12.04B
Ent Value$15.17B
P/E Ratio23.96x
Book Value$32.95
Div Yield0.15%
Shares O/S73.76M
Ave Daily Vol999,873
Short Int4.30%

Current

Price$39.47
Market Cap$2.36B
Advance Auto Parts, Inc. is a retailer of automotive aftermarket parts, accessories, batteries and maintenance items. Its stores carry an extensive product line for cars, vans; sport utility vehicles and light trucks. The company operates through two segments: Advance Auto Parts and Autopart International. The Advance Auto Parts segment is comprised of its store operations within the Northeastern, Mid-Atlantic, Southeastern and Midwestern regions of the United States, Puerto Rico and the Virgin Islands, which operate under the trade names Advance Auto Parts, Advance Discount Auto Parts and Western Auto. The Autopart International segment serves the commercial market for imported cars from its store locations in the Northeastern and Mid-Atlantic regions of the U.S. and Florida. The company was founded by Arthur Taubman in 1929 and is headquartered in Roanoke, VA.

Please note, this is an update to Long - Advance Auto Parts, which was presented on October 19, 2015 ($193.59).

Publicly traded companies mentioned herein: Advance Auto Parts Inc (AAP), O’Reilly Automotive Inc (ORLY)

Highlights

The presenter is long shares of Advance Auto Parts (AAP), expecting margin improvements as AAP operations move more in line with industry leaders. He sees a combination of “different fruit at different levels,” some easier and others harder to achieve, but believes the margin gap that exists between AAP and top competitors is large enough that even easy fixes will have a large effect on the bottom line. With 300 basis points (out of a possible 600 by the presenter’s estimate) of EBIT improvement, he sees AAP’s share price appreciating to $300 over time.

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