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This morning while screening on Barchart for S&P 500 companies experiencing a 100% technical buy signal near the top of the list was O'Reilly Automotive (NASDAQ:ORLY). The stock hit 5 new highs last month and is up over 4.22% in a down market. It's competition is Autozone (NYSE:AZO) and Advance Auto Parts (NYSE:AAP) scoring 72% buy and 64% sell respectively.


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O'Reilly Automotive, Inc. is a specialty retailer and supplier of automotive aftermarket parts, tools, supplies, equipment and accessories to both "do-it-yourself" customers and professional mechanics or service technicians. O'Reilly stores carry an extensive product line consisting of new and remanufactured automotive hard parts, such as alternators, starters, fuel pumps, water pumps, and brake shoes and pads, maintenance items, such as oil, antifreeze, fluids, engine additives and appearance products, accessories, such as floor mats and seat covers. This year they plan to add 170 locations mostly in the western U.S.

Factors to consider:

Barchart technical indicators:

  • 100% Barchart technical buy signal.
  • Trend Spotter buy signal.
  • Above its 20, 50 and 100 day moving averages.
  • 5 new highs and up 4.22% in the last month.
  • Relative Strength Index is 67.34% and rising.
  • Trades around 62.06 with a 50 day moving average of 58.95.

Fundamental Factors:

  • Wall Street brokerage analysts have released 5 strong buy, 4 buy, 10 hold and 3 negative reports.
  • Sales are projected to increase by 7.70% this year and another 7.50% next year.
  • Double digit earnings increases are forecasted with an increase of 17.00% this year, 12.00% next year and 15.97% annually for the next 5 years.

General Investor Sentiment:

  • There are 341 readers giving an opinion on the stock on Motley Fool and 94% are looking for the stock to beat the market.
  • CAPS members vote 238 to 14 for that result.
  • The more experienced All Stars agree with an 84 to 5 vote.

Summary: All the automotive repair stocks have done well during the recession as the average mileage on vehicles on the roads has continued to climb. Higher miles - more repairs. Analysts are softening their projections for several reasons. Higher gas prices mean less driving. New car sales increases mean the average mileage of cars on the road may come down. If the analysts projections for the increases in sales and earnings continue investors could see an annual total return in the 15% to 20% range for O"Reilly Automotive.

Source: O'Reilly Automotive Still Expanding