Advance Auto Parts (aap) Stock Research
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Company Description: Advance Auto Parts, Inc., based in Roanoke, Virginia, is a specialty retailer of automotive parts, accessories, and maintenance items for the consumer automotive industry. The company offers replacement parts, accessories, and chemicals for civilians who can choose to take advantage of Advance Auto Parts service or perform installations and maintenence themselves. Advance Auto Parts, Inc. is divided into two primary divisions: Advance Auto Parts (AAP) and AI. The AAP division operates 3,153 stores within the United States, Puerto Rico, and the Virgin Islands and offers a range of automotive parts including batteries, belts, brake pads, alternators, oil and transmission fluid, and other replacement and maintenance items. This division operates under the names Advance Auto Parts, Advance Discount Auto Parts, and Western Auto (2007). The AI segment operates under the name Autopart International and provides parts for the commercial automotive market, including third-party distributors and jobbers. As of 2007, this division operated 108 stores in North America. Update
Discretionary Industry Analysis: The consumer discretionary industry includes companies whose sales come from consumer discretionary income purchases. Discretionary income = gross income less taxes and necessities such as rent, mortgage and food. Discretionary Trading Strategy: The consumer discretionary industry tends to be very sensitive to economic cycles. Look for undervalued discretionary investments during economic recessions when stock prices are low and sell discretionary investments during the late stages of a bull markets when stock prices are high. The global economy is currently in a recession, therefore, it is the perfect time to purchase consumer discretionary investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.
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Market Challenges: Opportunities: Solutions:
Advance Auto Parts's business strategy is to keep things simple. Clearly-defined strategies lower business risks by staying within their areas of expertise. Advance Auto Parts possesses significant barriers to entry that slows competitive threats and increases profits. Advance Auto Parts's strategy is to accomplish clear, attainable, and challenging goals. This focus increases company value and long-term investor returns. A culture that experiments produces better long term value. Advance Auto Parts's experimentations yield new products and services that outpace competitive threats.
Strategy: Advance Auto Parts targets customers who have very specific needs and with solutions that are difficult to replicate. (read more). Competitive Advantages:
Complicated financial statements lower Advance Auto Parts's value, because it increases the risk of fraud and lowers investor confidence.
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