November 9, 2023
Top 10 Stock Advance Auto Parts Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Advance Auto Parts – Top 10 Stock in S&P 500 Consumer Discretionary Index
Advance Auto Parts is listed as a top 10 stock on November 09, 2023 in the market index S&P US Luxury because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 83 (top 83% performer), Obermatt assesses an overall strong buy recommendation for Advance Auto Parts on November 09, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Automotive Retail |
| Index | Dividends USA, S&P US Luxury, S&P 500 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Advance Auto Parts Strong Buy
| 360 METRICS | November 9, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 88 |
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| SENTIMENT | ||||||||
| SENTIMENT | 38 |
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| 360° VIEW | ||||||||
| 360° VIEW | 83 |
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ANALYSIS: With an Obermatt 360° View of 83 (better than 83% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Advance Auto Parts are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Advance Auto Parts. The consolidated Value Rank has an attractive rank of 88, which means that the share price of Advance Auto Parts is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 88% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 88. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 38. Professional investors are more confident in 62% other stocks. The consolidated Growth Rank also has a low rank of 29, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 71 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 83, Advance Auto Parts is better positioned than 83% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 88), and the financing structure is on the safer side (Safety Rank of 88). However, sentiment in the professional investor community is below-average (Sentiment Rank of 38), as is the growth momentum for the company (Growth Rank of 29). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Advance Auto Parts only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 38 (better than 38% compared with alternatives), overall professional sentiment and engagement for the stock Advance Auto Parts is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Advance Auto Parts. Analyst Opinions are at a rank of 25 (worse than 75% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 39, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 21, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 79% of competitors). On the upside, the Professional Investors rank is 74, which means that professional investors hold more stock in this company than in 74% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 38 (less encouraging than 62% compared with investment alternatives), Advance Auto Parts has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Advance Auto Parts stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Advance Auto Parts Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% compared with alternatives) for 2023, Advance Auto Parts shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Advance Auto Parts. Price-to-Sales is 57 which means that the stock price compared with what market professionals expect for future sales is lower than for 57% of comparable companies, indicating a good value for Advance Auto Parts's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 59% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 74. Compared with other companies in the same industry, dividend yields of Advance Auto Parts are expected to be higher than for 76% of all competitors (a Dividend Yield rank of 76). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, is a buy recommendation based on Advance Auto Parts's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Advance Auto Parts based on its detailed value metrics.
Growth Strategy: Advance Auto Parts Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Advance Auto Parts shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Advance Auto Parts. Only Capital Growth has a good rank of 95, which means that currently professionals expect the company to grow its invested capital more than 16% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 34 which means that currently professionals expect the company to grow less than 66% of its competitors. Profit Growth with a rank of 16 and Stock Returns with a rank of 7 are also low (below 93% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Advance Auto Parts is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Advance Auto Parts Debt Financing Safety very solid
| SAFETY METRICS | November 9, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 63 |
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| REFINANCING | ||||||||
| REFINANCING | 78 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 70 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 88 |
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ANALYSIS: With an Obermatt Safety Rank of 88 (better than 88% compared with alternatives) for 2023, the company Advance Auto Parts has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Advance Auto Parts is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Advance Auto Parts. Leverage is at 63, meaning the company has a below-average debt-to-equity ratio. It has less debt than 63% of its competitors. Refinancing is at a rank of 78, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 78% of its competitors. Finally, Liquidity is also good at a rank of 70, which means that the company generates more profit to service its debt than 70% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 88 (better than 88% compared with alternatives), Advance Auto Parts has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Advance Auto Parts Top Financial Performance
| COMBINED PERFORMANCE | November 9, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| COMBINED | ||||||||
| COMBINED | 88 |
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ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), Advance Auto Parts (Automotive Retail, USA) shares have much better financial characteristics than comparable stocks. Shares of Advance Auto Parts are a good value (attractively priced) with a consolidated Value Rank of 88 (better than 88% of alternatives), are safely financed (Safety Rank of 88, which means low debt burdens), but show below-average growth (Growth Rank of 29). ...read more
RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on Advance Auto Parts's financial characteristics. As the company Advance Auto Parts's key financial metrics exhibit good value (Obermatt Value Rank of 88) but low growth (Obermatt Growth Rank of 29) while being safely financed (Obermatt Safety Rank of 88), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 88% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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