10 Stocks To Buy Before They Split Next

7. O’Reilly Automotive Inc. (NASDAQ:ORLY)

Share Price as of October 18: $1,201.38

Surge in Share Price in 5 Years: 197.96%

Stock Split Confirmed: no

Number of Hedge Fund Holders: 52

O’Reilly Automotive Inc. (NASDAQ:ORLY) is an auto parts retailer that provides automotive aftermarket parts, tools, supplies, equipment, and accessories for both professional and do-it-yourself customers. It’s known for its focus on customer service, competitive pricing, and a strong commitment to community involvement.

Q2 2024 started a bit slow due to unfavorable weather conditions, but the company experienced a resurgence later, fueled by demand for seasonal products. June marked the peak of this resurgence, with consistent sales momentum continuing into July. Total revenue generated was $4.27 billion, up 4.99% year-over-year. Earnings per share reached $10.55. Although overall sales were below expectations, positive customer sentiment led to a 2.3% increase in comparable store sales.

Its share price is up 18% recently, near its yearly high. The financial outlook is promising, with projected earnings and revenue growth rates of 6.9% and 5.8% respectively for 2024.

The company’s strong performance is fueled by increased customer transactions and exceptional service. Strategic expansion, including 27 new store openings in Q2, positions it for continued growth. While the company has lowered its full-year sales guidance due to economic concerns, its long-term outlook remains positive, driven by the enduring demand for automotive aftermarket products. O’Reilly Automotive Inc.’s (NASDAQ:ORLY) commitment to customer satisfaction and market share expansion is expected to drive future growth.

ClearBridge Large Cap Value Strategy stated the following regarding O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its Q3 2024 investor letter:

“Skepticism over the consumer has left some high-quality stocks with depressed valuations and allowed us to reduce our consumer discretionary underweight with the addition of O’Reilly Automotive, Inc. (NASDAQ:ORLY) and Starbucks. While we have been cautious on retailers for quite some time, auto parts retailer O’Reilly is a best-in-class, high-quality operator with high returns on invested capital and a solid history of consistent execution and sustainable share gain, and it enjoys rational competitive dynamics in the broader industry. In addition, auto parts retailing carries some counter-cyclicality as consumers tend to hold on to their cars longer, requiring more repair and maintenance, during softer economic environments. We think a high-quality franchise like O’Reilly trading at a reasonable valuation in an otherwise expensive market is worth our attention and we initiated a starter position.”