Auto Parts Industry is Soaring

by Sean Hyman

It’s no secret that credit is tight right now and loans are hard to come by. It’s also no secret that car sales are diving off across the board. In fact, no nationality has been spared. Detroit and Japanese auto makers alike have been punished.

Not only has this been a credit issue but it’s been a “jobs” issue as well. The unemployment rate has grown so much lately (currently 7.6%), that either you’ve lost your job or you know someone who has. This frightens the employed and hinders the unemployed from new purchases. So both parties hold back on new “big ticket” purchases.

This has been a nightmare so horrid for the auto industry that had the government not bailed them out, we probably wouldn’t have an auto industry left. That would be sad since (as Obama put it last night) we invented the automobile. (Did the US really invent the automobile?)

However, there is a bright spot in all of this for the investor to consider. If you and I are holding on to our cars longer and we’re not making any new purchases, then we are more likely to repair the ones we’ve got in order to make them last longer.

As a result, the auto parts industry is soaring as Americans all over repair their vehicles rather than get new ones.

Three auto parts stocks that are flying high right now!

So with that thought in mind, I’d encourage you to look into a few auto parts stocks like: O’ Reilly Automotive (ORLY), AutoZone Inc (AZO) and Advance Auto Parts Inc (AAP).

O’ Reilly and AutoZone have both recently knocked out 52 week highs and Advance Auto Parts has started a recent uptrend since last October. How many companies can boast that? Not many. So that’s why I wanted to point these out.

In fact, check out the chart below. AutoZone is on top. O’Reilly is the middle chart and Advance Auto is the bottom chart.

These Stocks are Thriving in this Recession! (Click to enlarge)

As we heard from Obama’s speech Tuesday night, the recovery will be gradual and slow. It will not happen quickly. Knowing this, there’s a great chance that individuals and corporations alike may be repairing their cars and “fleet” instead of new purchases until we get out of this recessionary slump.

Bernanke told us Tuesday that it may take until the end of 2009 or into 2010 until the recession has ended and we’re out of the woods.

Therefore, these stocks could still “have legs” for quite some time knowing that things aren’t getting better tomorrow. So since things aren’t getting better in the short run, investors might as well seize the opportunity to help their ailing portfolios by buying companies that are prospering NOW.