10 Best Stocks to Buy for the Long-Term According to Charles Akre

5. O’Reilly Automotive, Inc. (NASDAQ:ORLY)

Akre Capital Management’s First Major Purchase: 2011

Akre Capital Management’s stake value: $1.06 Billion

Number of Hedge fund holders as of Q3: 41

O’Reilly Automotive, Inc. (NASDAQ:ORLY) is one of the largest retailers and suppliers of automotive aftermarket parts, tools, supplies, equipment, and accessories. It provides new and remanufactured automotive complex parts and maintenance items, such as alternators, batteries and brake system components. Its stock is up by more than 34% for the year, signaling investor confidence about the company’s growth metrics.

The outperformance underscores the retailer’s strong performance in a competitive market amid a challenging macro environment. Nevertheless, O’Reilly Automotive, Inc. (NASDAQ:ORLY) has stood against its peers by capitalizing on growth initiatives and robust consumer demand in the automotive industry. The company delivered impressive third-quarter results on October 23, 2024.

Sales in the quarter were up 4% to $4.36 billion as gross profit also increased 4% to $2.25 billion. Net income increased 2% to $665 million as diluted earnings per share soared 6% to $11.41. The strong Q3 results come as O’Reilly Automotive continues to benefit from a robust culture and efficient supply chain in the automotive industry.

In addition, O’Reilly Automotive, Inc. (NASDAQ:ORLY) is benefiting from an aggressive expansion drive. It has already opened 37 new stores in the US and Mexico, strengthening its revenue base. It has also expanded its footprint into Canada with the acquisition of Vast Auto.

TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its Q3 2024 investor letter:

“O’Reilly Automotive, Inc. (NASDAQ:ORLY), a specialty retailer of aftermarket auto parts and accessories, rose 9%. The company reported weaker-than-expected second quarter results, which management attributed to a soft demand environment. Wet spring weather and budget-conscious consumers impacted the do-it-yourself segment. However, their professional mechanic/do-it-for-me business was stable and in line with Street estimates. O’Reilly has reduced variable costs without sacrificing service levels.”