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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 7/10

vs
industry
vs
history
Cash to Debt 1.06
AAP's Cash to Debt is ranked higher than
61% of the 1083 Companies
in the Global Specialty Retail industry.

( Industry Median: 2.50 vs. AAP: 1.06 )
AAP' s 10-Year Cash to Debt Range
Min: 0.02   Max: No Debt
Current: 1.06

Equity to Asset 0.27
AAP's Equity to Asset is ranked lower than
55% of the 1073 Companies
in the Global Specialty Retail industry.

( Industry Median: 0.52 vs. AAP: 0.27 )
AAP' s 10-Year Equity to Asset Range
Min: 0.1   Max: 0.42
Current: 0.27

0.1
0.42
Interest Coverage 18.03
AAP's Interest Coverage is ranked higher than
63% of the 771 Companies
in the Global Specialty Retail industry.

( Industry Median: 34.17 vs. AAP: 18.03 )
AAP' s 10-Year Interest Coverage Range
Min: 0.45   Max: 21.78
Current: 18.03

0.45
21.78
F-Score: 6
Z-Score: 3.36
M-Score: -2.14
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 8/10

vs
industry
vs
history
Operating margin (%) 10.17
AAP's Operating margin (%) is ranked higher than
85% of the 1067 Companies
in the Global Specialty Retail industry.

( Industry Median: 5.56 vs. AAP: 10.17 )
AAP' s 10-Year Operating margin (%) Range
Min: 1.39   Max: 10.77
Current: 10.17

1.39
10.77
Net-margin (%) 6.03
AAP's Net-margin (%) is ranked higher than
81% of the 1066 Companies
in the Global Specialty Retail industry.

( Industry Median: 3.93 vs. AAP: 6.03 )
AAP' s 10-Year Net-margin (%) Range
Min: -1.26   Max: 6.4
Current: 6.03

-1.26
6.4
ROE (%) 25.84
AAP's ROE (%) is ranked higher than
94% of the 1049 Companies
in the Global Specialty Retail industry.

( Industry Median: 9.28 vs. AAP: 25.84 )
AAP' s 10-Year ROE (%) Range
Min: -18.91   Max: 46.55
Current: 25.84

-18.91
46.55
ROA (%) 7.04
AAP's ROA (%) is ranked higher than
81% of the 1065 Companies
in the Global Specialty Retail industry.

( Industry Median: 4.71 vs. AAP: 7.04 )
AAP' s 10-Year ROA (%) Range
Min: -1.88   Max: 10.8
Current: 7.04

-1.88
10.8
ROC (Joel Greenblatt) (%) 47.27
AAP's ROC (Joel Greenblatt) (%) is ranked higher than
88% of the 1066 Companies
in the Global Specialty Retail industry.

( Industry Median: 20.96 vs. AAP: 47.27 )
AAP' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 7.08   Max: 52.25
Current: 47.27

7.08
52.25
Revenue Growth (%) 9.20
AAP's Revenue Growth (%) is ranked higher than
77% of the 786 Companies
in the Global Specialty Retail industry.

( Industry Median: 6.50 vs. AAP: 9.20 )
AAP' s 10-Year Revenue Growth (%) Range
Min: 5.3   Max: 14
Current: 9.2

5.3
14
EBITDA Growth (%) 11.40
AAP's EBITDA Growth (%) is ranked higher than
76% of the 671 Companies
in the Global Specialty Retail industry.

( Industry Median: 9.40 vs. AAP: 11.40 )
AAP' s 10-Year EBITDA Growth (%) Range
Min: 6.8   Max: 100.8
Current: 11.4

6.8
100.8
EPS Growth (%) 10.40
AAP's EPS Growth (%) is ranked higher than
71% of the 621 Companies
in the Global Specialty Retail industry.

( Industry Median: 11.60 vs. AAP: 10.40 )
AAP' s 10-Year EPS Growth (%) Range
Min: 5.5   Max: 133.7
Current: 10.4

5.5
133.7
» AAP's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q1 2013

AAP Guru Trades in Q1 2013

Louis Moore Bacon 30,650 sh (New)
Ray Dalio 23,432 sh (New)
Jeremy Grantham 15,744 sh (+417.21%)
Chuck Royce 13,161 sh (+183.64%)
Jim Simons 634,750 sh (+33.93%)
Private Capital 202,130 sh (+20.67%)
Ruane Cunniff 7,229,243 sh (+0.06%)
Richard Blum 324,900 sh (-5.38%)
Mario Gabelli 13,000 sh (-18.75%)
Richard Perry 797,840 sh (-20.22%)
Joel Greenblatt 5,381 sh (-76.67%)
Steven Cohen 5,775 sh (-97.63%)
» More
Q2 2013

AAP Guru Trades in Q2 2013

Steven Cohen 140,580 sh (+2334.29%)
Richard Perry 1,631,688 sh (+104.51%)
Private Capital 271,720 sh (+34.43%)
Chuck Royce 15,081 sh (+14.59%)
Mario Gabelli 13,000 sh (unchged)
Louis Moore Bacon Sold Out
Ray Dalio Sold Out
Joel Greenblatt Sold Out
Jeremy Grantham 15,200 sh (-3.46%)
Ruane Cunniff 6,250,587 sh (-13.54%)
Richard Blum 239,741 sh (-26.21%)
Jim Simons 355,150 sh (-44.05%)
» More
Q3 2013

AAP Guru Trades in Q3 2013

Paul Singer 200,000 sh (New)
Ray Dalio 8,300 sh (New)
Larry Robbins 2,717,938 sh (New)
Joel Greenblatt 16,753 sh (New)
Chuck Royce 21,901 sh (+45.22%)
Jim Simons 448,350 sh (+26.24%)
Jeremy Grantham 18,713 sh (+23.11%)
Private Capital 293,693 sh (+8.09%)
Caxton Associates 200,000 sh (unchged)
Richard Blum Sold Out
Richard Perry Sold Out
Ruane Cunniff 6,188,254 sh (-1%)
Mario Gabelli 10,000 sh (-23.08%)
Steven Cohen 4,456 sh (-96.83%)
» More
Q4 2013

AAP Guru Trades in Q4 2013

Charles Brandes 2,402 sh (New)
Eric Mindich 109,375 sh (New)
Steven Cohen 197,204 sh (+4325.58%)
Jeremy Grantham 34,057 sh (+82%)
Mario Gabelli 10,000 sh (unchged)
Jim Simons Sold Out
Paul Singer Sold Out
Ray Dalio 7,900 sh (-4.82%)
Larry Robbins 2,317,353 sh (-14.74%)
Chuck Royce 14,601 sh (-33.33%)
Private Capital 169,418 sh (-42.31%)
Ruane Cunniff 1,682,394 sh (-72.81%)
Joel Greenblatt 2,252 sh (-86.56%)
» More
» Details

Insider Trades

Latest Guru Trades with AAP

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Ruane Cunniff 2013-12-31 Reduce -72.81%2.18%$80.48 - $110.28 $ 121.6122%1682394
Joel Greenblatt 2013-12-31 Reduce -86.56%0.04%$80.48 - $110.28 $ 121.6122%2252
Charles Brandes 2013-12-31 New Buy$80.48 - $110.28 $ 121.6122%2402
Richard Perry 2013-09-30 Sold Out 3.4%$79.12 - $84.49 $ 121.6149%0
Joel Greenblatt 2013-09-30 New Buy0.05%$79.12 - $84.49 $ 121.6149%16753
Ray Dalio 2013-09-30 New Buy0.01%$79.12 - $84.49 $ 121.6149%8300
Mario Gabelli 2013-09-30 Reduce -23.08%$79.12 - $84.49 $ 121.6149%10000
Richard Perry 2013-06-30 Add 104.51%1.74%$78.71 - $87.18 $ 121.6147%1631688
Ruane Cunniff 2013-06-30 Reduce -13.54%0.53%$78.71 - $87.18 $ 121.6147%6250587
Ray Dalio 2013-06-30 Sold Out 0.02%$78.71 - $87.18 $ 121.6147%0
Joel Greenblatt 2013-06-30 Sold Out 0.02%$78.71 - $87.18 $ 121.6147%0
Richard Perry 2013-03-31 Reduce -20.22%0.55%$71.76 - $82.65 $ 121.6159%797840
Joel Greenblatt 2013-03-31 Reduce -76.67%0.07%$71.76 - $82.65 $ 121.6159%5381
Ray Dalio 2013-03-31 New Buy0.02%$71.76 - $82.65 $ 121.6159%23432
Premium More recent guru trades are included for Premium Members only!!
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Guru Investment Theses on Advance Auto Parts Inc

Sequoia Fund Comments on Advance Auto Parts - Mar 07, 2014

We sold a large portion of our holding in Advance Auto Parts shortly after the company announced a deal to buy General Parts International, parent of Carquest stores, in the fall. The stock price understandably soared on the news as Advance bought GPI on favorable terms and should be able to harvest significant synergies out of the deal, thus accelerating its earnings growth. However, we’d been concerned about poor execution in legacy Advance stores for some time and felt it prudent to reduce our holding as the stock price soared. If the company integrates GPI well and improves performance in its own stores, our sale may turn out to be a mistake.





Source: Sequoia Fund 2013 Annual Shareholder Letter



Check out Sequoia Fund latest stock trades

RS Investments Comments on AAP - Jul 18, 2012

From RS Investments Value Fund's second-quarter commentary:

Advance Auto Parts (AAP) is the second largest auto parts retailer in the U.S. operating over 3,600 stores in 39 states. The company sells primarily non-discretionary automotive parts such as car batteries, brake pads, spark plugs, and mufflers to both do-it-yourself customers as well as commercial garages via its parts-delivery truck service. Our investment in Advanced Auto Parts was predicated on the following thesis: (1) solid industry fundamentals with acyclical demand drivers, defensible competitive positioning, and reasonable reinvestments opportunities; (2) a companyspecific opportunity to meaningfully improve the Company's financial performance as measured by sales productivity, operating margins, asset turns, and overall Return on Invested Capital (ROIC) relative to its two primary competitors (AutoZone and O'Reilly); and (3) a new leadership team with a solid business plan for narrowing this performance gap.

At the time of our initial investment in 2007, Advanced Auto Parts was operating with sales-persquare- foot of $180, operating margins of 8.5%, a payables-to-inventory ratio of 50%, and was generating reinvestment cash flow of approximately $280 million on an invested capital base of $1.6 billion. Through successful implementation of a wide variety of operating initiatives, including greater parts availability, enhanced price optimization, better vendor terms, and improved labor productivity, CEO Darren Jackson and his team meaningfully improved the financial performance of the company. Today, Advanced Auto Parts operates with sales of $230 per foot, operating margins approaching 11%, a payables-to-inventory ratio of 80%, and is generating reinvestment cash flows of approximately $460 million on a reduced invested capital base of $1.4 billion. Overall company ROIC has improved from 13-14% in 2007 to approximately 20% today. Advanced Auto Parts' share price has tracked this improvement in ROIC, appreciating from a stock that traded in the high $30s at the time of our initial investment to $90 per share more recently. Over the past five years we have both added to and trimmed our position size, depending on the relative risk/reward in the market, and we ultimately exited the position at the beginning of the second quarter at a substantial gain.

Check out RS Investment Management latest stock trades

Top Ranked Articles about Advance Auto Parts Inc

Sequoia Fund Comments on Valeant Pharmaceuticals, Advance Auto Parts, Berkshire Hathaway, and Precision Castparts
Sequoia benefited greatly from two transformative acquisitions announced in 2013: Valeant’s purchase of Bausch & Lomb and Advance Auto Parts’ purchase of General Parts International. Both deals were game changers which will significantly increase these two companies’ earnings beginning in 2014. While we’ve long been partial to companies that can grow organically, Sequoia’s returns have been boosted considerably by companies that may have limited organic growth opportunities but have done smart serial acquisitions, such as Valeant Pharmaceuticals and Berkshire Hathaway. Precision Castparts has been another serial acquirer that has created great value for shareholders. Read more...
Sequoia Fund Comments on Advance Auto Parts
We sold a large portion of our holding in Advance Auto Parts shortly after the company announced a deal to buy General Parts International, parent of Carquest stores, in the fall. The stock price understandably soared on the news as Advance bought GPI on favorable terms and should be able to harvest significant synergies out of the deal, thus accelerating its earnings growth. However, we’d been concerned about poor execution in legacy Advance stores for some time and felt it prudent to reduce our holding as the stock price soared. If the company integrates GPI well and improves performance in its own stores, our sale may turn out to be a mistake. Read more...
Richard Perry's Top Second Quarter Portfolio Changes
During the second quarter Guru Richard Perry made noticeable increases in two companies as well as noticeable reductions in his holdings in three. Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 22.80
AAP's P/E(ttm) is ranked higher than
50% of the 887 Companies
in the Global Specialty Retail industry.

( Industry Median: 17.80 vs. AAP: 22.80 )
AAP' s 10-Year P/E(ttm) Range
Min: 10.07   Max: 32.36
Current: 22.8

10.07
32.36
P/B 6.00
AAP's P/B is ranked lower than
69% of the 1036 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.71 vs. AAP: 6.00 )
AAP' s 10-Year P/B Range
Min: 2.34   Max: 7.35
Current: 6

2.34
7.35
P/S 1.37
AAP's P/S is ranked lower than
63% of the 1107 Companies
in the Global Specialty Retail industry.

( Industry Median: 0.74 vs. AAP: 1.37 )
AAP' s 10-Year P/S Range
Min: 0.5   Max: 1.45
Current: 1.37

0.5
1.45
PFCF 25.70
AAP's PFCF is ranked higher than
51% of the 593 Companies
in the Global Specialty Retail industry.

( Industry Median: 19.33 vs. AAP: 25.70 )
AAP' s 10-Year PFCF Range
Min: 6.33   Max: 122.81
Current: 25.7

6.33
122.81
EV-to-EBIT 13.50
AAP's EV-to-EBIT is ranked higher than
59% of the 968 Companies
in the Global Specialty Retail industry.

( Industry Median: 13.34 vs. AAP: 13.50 )
AAP' s 10-Year EV-to-EBIT Range
Min: 6.8   Max: 14.3
Current: 13.5

6.8
14.3
PEG 1.40
AAP's PEG is ranked higher than
60% of the 521 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.29 vs. AAP: 1.40 )
AAP' s 10-Year PEG Range
Min: 0.53   Max: 2.14
Current: 1.4

0.53
2.14
Shiller P/E 28.10
AAP's Shiller P/E is ranked lower than
52% of the 541 Companies
in the Global Specialty Retail industry.

( Industry Median: 20.92 vs. AAP: 28.10 )
AAP' s 10-Year Shiller P/E Range
Min: 12.22   Max: 29.54
Current: 28.1

12.22
29.54

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 0.20
AAP's Dividend Yield is ranked lower than
96% of the 745 Companies
in the Global Specialty Retail industry.

( Industry Median: 2.00 vs. AAP: 0.20 )
AAP' s 10-Year Dividend Yield Range
Min: 0.14   Max: 0.93
Current: 0.2

0.14
0.93
Dividend Payout 0.05
AAP's Dividend Payout is ranked higher than
97% of the 633 Companies
in the Global Specialty Retail industry.

( Industry Median: 0.33 vs. AAP: 0.05 )
AAP' s 10-Year Dividend Payout Range
Min: 0.05   Max: 0.11
Current: 0.05

0.05
0.11
Yield on cost (5-Year) 0.20
AAP's Yield on cost (5-Year) is ranked lower than
95% of the 770 Companies
in the Global Specialty Retail industry.

( Industry Median: 2.31 vs. AAP: 0.20 )
AAP' s 10-Year Yield on cost (5-Year) Range
Min: 0.14   Max: 0.93
Current: 0.2

0.14
0.93
Share Buyback Rate 5.60
AAP's Share Buyback Rate is ranked higher than
95% of the 655 Companies
in the Global Specialty Retail industry.

( Industry Median: -0.60 vs. AAP: 5.60 )
AAP' s 10-Year Share Buyback Rate Range
Min: 8   Max: -16.2
Current: 5.6

Valuation & Return

vs
industry
vs
history
Price/Tangible Book 7.00
AAP's Price/Tangible Book is ranked lower than
74% of the 937 Companies
in the Global Specialty Retail industry.

( Industry Median: 2.00 vs. AAP: 7.00 )
AAP' s 10-Year Price/Tangible Book Range
Min: 3.14   Max: 6.85
Current: 7

3.14
6.85
Price/DCF (Projected) 1.20
AAP's Price/DCF (Projected) is ranked higher than
64% of the 551 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.20 vs. AAP: 1.20 )
AAP' s 10-Year Price/DCF (Projected) Range
Min: 0.76   Max: 1.84
Current: 1.2

0.76
1.84
Price/Median PS Value 1.60
AAP's Price/Median PS Value is ranked lower than
67% of the 1015 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.00 vs. AAP: 1.60 )
AAP' s 10-Year Price/Median PS Value Range
Min: 0.64   Max: 1.45
Current: 1.6

0.64
1.45
Price/Peter Lynch Fair Value 1.20
AAP's Price/Peter Lynch Fair Value is ranked higher than
59% of the 319 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.10 vs. AAP: 1.20 )
AAP' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.7   Max: 1.74
Current: 1.2

0.7
1.74
Price/Graham Number 2.70
AAP's Price/Graham Number is ranked lower than
65% of the 775 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.40 vs. AAP: 2.70 )
AAP' s 10-Year Price/Graham Number Range
Min: 1.37   Max: 6.07
Current: 2.7

1.37
6.07
Earnings Yield (Greenblatt) 7.40
AAP's Earnings Yield (Greenblatt) is ranked higher than
62% of the 983 Companies
in the Global Specialty Retail industry.

( Industry Median: 7.40 vs. AAP: 7.40 )
AAP' s 10-Year Earnings Yield (Greenblatt) Range
Min: 7   Max: 14.7
Current: 7.4

7
14.7
Forward Rate of Return (Yacktman) 21.70
AAP's Forward Rate of Return (Yacktman) is ranked higher than
86% of the 727 Companies
in the Global Specialty Retail industry.

( Industry Median: 10.63 vs. AAP: 21.70 )
AAP' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 2.5   Max: 30.1
Current: 21.7

2.5
30.1

Business Description

Industry: Retail - Apparel & Specialty » Specialty Retail
Compare:TSCO, AMZN, EBAY, FIVE, AZO » details
Traded in other countries:AWN.Germany
Advance Auto Parts, Inc. was founded in 1929 as Advance Stores Company, Incorporated. It is a specialty retailer of automotive aftermarket parts, accessories, batteries and maintenance items operating within the United States. Its stores carry an extensive product line for cars, vans, sport utility vehicles and light trucks. The Company serves both do-it-yourself, or DIY, and 'do-it-for-me,' or Commercial, customers. It operates in two reportable segments: Advance Auto Parts, or AAP, and Autopart International, or AI. At December 29, 2012, it operated 3,576 AAP stores throughout 39 states in the Northeastern, Mid-Atlantic, Southeastern and Midwestern regions of the United States, Puerto Rico and the Virgin Islands. These stores operated under the 'Advance Auto Parts' trade name except for certain stores in the state of Florida, which operated under the 'Advance Discount Auto Parts' trade name. These stores offer a broad selection of brand name and proprietary automotive replacement parts, accessories, batteries and maintenance items for domestic and imported cars and light trucks. In addition, it operated 26 stores under the 'Western Auto' and 'Advance Auto Parts' trade names, located in Puerto Rico and the Virgin Islands, or Offshore. AI's business mainly serves the Commercial market, with an emphasis on parts for imported cars, from its store locations located mainly throughout the Northeastern and Mid-Atlantic regions of the United States and Florida. In addition, its North American Sales Division serves warehouse distributors and jobbers throughout North America. The vast majority of AI's product is sold under its own proprietary brand. The AI stores offer approximately 30,000 SKUs through routine replenishment from its supply chain with access to an additional 100,000 to 120,000 SKUs through local sourcing networks. The Company owns a number of trade names and own and have federally registered several service marks and trademarks, including "Advance Auto Parts," "Autopart International," "DriverSide," "MotoLogic," and "Service is its best part," for use in connection with the automotive parts retailing business. Its primary competitors are both national and regional retail chains of automotive parts stores, including AutoZone, Inc., O'Reilly Automotive, Inc. and The Pep Boys-Manny, Moe & Jack. The Company is subject to various federal, state and local laws and governmental regulations relating to the operation of its business, including those governing recycling of automotive lead-acid batteries and used automotive oil, and ownership and operation of real property.

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