Advance Auto Parts Continues A Winning Formula

It's funny how quality companies manage to keep on growing in spite of the wisdom of "smart money". Take the case of the auto parts suppliers - Advance Auto Parts (NYSE:AAP), AutoZone (NYSE:AZO) and O'Reilly Automotive (Nasdaq:ORLY) have continued to grow in spite of trends in the auto industry that are supposed to be bad for them. The thought was that as automakers like Toyota (NYSE:TM) and Ford (NYSE:F) incorporated more electronics, computers and sophisticated controls into vehicles, it would make it more difficult for people to fix their cars and demand for auto parts would weaken.


Well, so far that is not happening.  


The Quarter That Was

Advance Auto just keeps on keeping on. Sales in the June quarter rose a little more than 7%, with same-store sales up nearly 6%. That is solid growth given the economy these days, and is a full point better than in the year-ago period. Nevertheless, at least a few analysts or investors are going to point to the sequential decline in same-store sales growth as a "warning sign" (same-store sales did not decline sequentially, but the rate of growth did). Maybe that is fair with the worries about the economy slowing again, but long-term investors should pay it no mind. 


Here's a link to the full article on Investopedia:
http://stocks.investopedia.com/stock-analysis/2010/Advance-Auto-Parts-Continues-A-Winning-Formula-AAP-AZO-ORLY-TM-F-HD-WMT0816.aspx