12 Stocks to Buy That May Be Splitting Soon

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

Share Price as of March 17: $1,327.41

Surge in Share Price in 5 Years: 403.25%

Stock Split Confirmed: No

Number of Hedge Fund Holders: 63

O’Reilly Automotive Inc. (NASDAQ:ORLY) retails and supplies automotive aftermarket parts, tools, and accessories across the US, Puerto Rico, Mexico, and Canada. It caters to both DIY and professional customers and offers a range of products and services. These include hard parts, maintenance items, and various support programs, under numerous proprietary brands.

The company’s Professional business consistently achieved mid-single-digit comparable store sales growth throughout 2024. This segment caters to professional mechanics and garages, and its strong performance is crucial to the company’s overall success. Professional ticket counts also contributed to sales growth. The company is gaining market share in the professional segment through exceptional customer service and industry-leading inventory availability. It’s strategically investing in its hub store network to enhance parts availability and expanding its distribution network to support this growth.

O’Reilly Automotive Inc. (NASDAQ:ORLY) maintains industry-leading inventory levels. The company now expects increased ticket counts due to higher industry growth rates and continued market share gains. Its focus on service and inventory positions it well for continued success in this segment.

Qualivian Investment Partners maintains O’Reilly Automotive Inc. (NASDAQ:ORLY)  as a long-term core holding due to its market leadership and strong capital allocation. It stated the following regarding the company in its Q3 2024 investor letter:

“O’Reilly Automotive, Inc. (NASDAQ:ORLY): The company reported Q2 2024 revenue growth of 5% on a SSS comp of 2.3%, while EPS grew 7%, both of which missed expectations. Management as well as competitor commentary suggested slowing demand industry wide. Operating cost leverage from a growing topline was offset by wage inflationary pressures, resulting in operating margins coming down by 40 bps year-on-year. The company revised full-year guidance down for revenue, same- store-sales comp growth, and EPS to account for the miss in the quarter.

ORLY is the leader in the automotive retail parts marketplace and has outexecuted the competition, especially the smaller mom and pop auto parts stores that cater to the retail and auto mechanic shops in the US. Furthermore, its historical deployment of its excess cash to repurchase its shares continues to be a key linchpin of its ability to generate shareholder returns more than the market. While we are maintaining a watchful eye on slowing market trends, we continue to see ORLY as a long-term core holding in the fund.”