Car parts firm
(ORLY - Get Report)
is the second-largest auto parts chain in the country, with more than 3,700 stores spread from coast to coast. Unlike peers, who largely built their retail business first, O'Reilly started off serving the commercial auto parts market. That gives the firm existing exposure to a lucrative business that rival retailers are actively trying to acquire right now.
While the acquisition of CSK Auto in 2008 shifted O'Reilly's sales mix more to the retail side, management has been aggressively working to make CSK's stores more like the operations at legacy O'Reilly stores. There's a lot of reason to like the auto parts business, either commercial or retail. The biggest is the average age of the U.S. car fleet -- while new auto sales have been strong lately, the average car on the road today is old than it's ever been before.
As consumers look to stretch more life out of their existing cars (and justify paying more for a car than ever before), car parts companies should continue to enjoy extensive growth on their income statements. O'Reilly's sales growth has been impressive over the last several years, and its debt load is manageable. We're betting on shares of this Rocket Stock this week.
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