Rob Sechan, Managing Partner, New Edge Capital O'Reilly Automotive Inc ORLY-Q PARTIAL SELL Mar 15, 2024

It's outperformed the market the past year and has had a good run. People were driving more, but maybe that's played out. has just trimmed it. Still likes it.

Largest in its space. $17B USD forecast 2024 revenue. Grew revenue last 5 years by 10.5%. Long-term tailwinds, as growing need for maintenance and repairs due to aging US automotive fleet. With an eye to interest rates and the economy, people have been holding onto their cars for longer. Resilient business. Increased share buybacks. He expects 12% EPS growth rate for next few years. No dividend.

Generally, retail is a tough industry. Wary of retail that's not specialty. Look at HD and ORLY, which are specialty retail, but wait for a pullback.

With the exchange rate, the return is actually higher for Canadian investors. PEG ratio got expensive for him, he sold. Trades at 27x PE, with 9-10% growth rate. Likes it long term. Opening new locations in US and Mexico. 200-day and 200-week MAs moving higher.

Used cars should do well after all these tariffs, which will make new cars more expensive and used ones (and repairs on existing cars) more attractive. Has a great record outperforming the S&P, a beautiful chart. Their last quarter was mixed, though fine to him. ORLY had a big same-store sales beat and smaller total revenue beat. Earnings were a little light, and the full-year forecast disappointed, but they always lowball guidance. Despite the huge sell-off this week, this stock is still up for the year.

This and AutoZone have emerged as a strong duopoly in car retail. Once the auto tariffs kick in, these stocks will thrive--new cars will become expensive, so people will need car parts to maintain their existing cars. The company has bought back a ton of shares, shrinking the share count by 65% since 2010.