Advance Auto Parts, Inc. (AAP, NYSE) ranks above 90 for the 12-Factor Sector and Reranked Overall scores. The stock has returned 35% so far this year, versus an average of 3% for consumer-discretionary stocks in the S&P 1500 Index. Those gains reflect strong quarterly profits and an improving outlook for the remainder of the year. Shares leapt 5% the day after the release of June-quarter results and 6% after the March-quarter report.
U.S. consumers’ confidence in the conditions for buying cars declined in June and July. Uncertainty about the U.S. economy tends to help Advance Auto, the second-largest domestic retailer of auto parts and accessories, as a higher volume of older cars on the road means more will need repair. The do-it-yourself business gained strength in the June quarter, while the newer commercial unit posted its 10th consecutive quarterly double-digit gain in same-store sales. Advance Auto is a Long-Term Buy.
Richard Moroney, Dow Theory Forecasts
