5 Best Car Repair Stocks to Buy Now

In this article, we discuss 5 best car repair stocks to buy now. If you want to read our discussion on the auto industry, head directly to 12 Best Car Repair Stocks to Buy Now. 

5. LKQ Corporation (NASDAQ:LKQ)

Number of Hedge Fund Holders: 33

LKQ Corporation (NASDAQ:LKQ) is involved in the distribution of replacement parts, components, and systems for vehicle repair and maintenance, along with specialty vehicle aftermarket products and accessories. Additionally, LKQ Corporation (NASDAQ:LKQ) provides products for recreational vehicles, towing, vehicle protection, marine electronics, and more. It is one of the best automotive stocks to invest in. 

On October 26, LKQ Corporation (NASDAQ:LKQ) reported a Q3 non-GAAP EPS of $0.86, falling short of Wall Street estimates by $0.10. The revenue increased 15% year-over-year to $3.6 billion, outperforming market consensus by $110 million. 

According to Insider Monkey’s third quarter database, 33 hedge funds were bullish on LKQ Corporation (NASDAQ:LKQ), compared to 32 funds in the preceding quarter. Cliff Asness’ AQR Capital Management is the leading stakeholder of the company, with 868,345 shares worth $43 million. 

Aristotle Small/Mid Cap Equity Strategy stated the following regarding LKQ Corporation (NASDAQ:LKQ) in its fourth quarter 2023 investor letter:

“LKQ Corporation (NASDAQ:LKQ), a North American market leader in alternative collision repair parts with expertise stemming across used, recycled, refurbished, and remanufactured collision repair parts as well as the market for (new) aftermarket collision repair, was added to the portfolio. Overall, we believe the company maintains favorable scale advantages that allow for volume purchase discounts from suppliers and a wider distribution network, higher fill rates, and faster response times relative to competition. Furthermore, the company has made investments in improving its technology and logistics network beyond that of its smaller competitors, which we believe will further cement its market position through technological sophistication.”

4. Aptiv PLC (NYSE:APTV)

Number of Hedge Fund Holders: 38

Aptiv PLC (NYSE:APTV) is a global company that engages in the design, manufacture, and sale of vehicle components, specializing in electrical, electronic, and safety technology solutions for the automotive and commercial vehicle markets. Aptiv PLC (NYSE:APTV) was incorporated in 2011 and is headquartered in Dublin, Ireland. It is one of the best automotive stocks to monitor. 

On January 31, Aptiv PLC (NYSE:APTV) reported a Q4 non-GAAP EPS of $1.40, beating Wall Street estimates by $0.07. Revenue for the period increased 5.6% compared to the prior-year quarter, but fell short of analysts’ expectations by $170 million. 

According to Insider Monkey’s third quarter database, 38 hedge funds were bullish on Aptiv PLC (NYSE:APTV), compared to 40 funds in the preceding quarter. Ian Simm’s Impax Asset Management is the biggest position holder in the company, with 6.8 million shares worth $668.8 million. 

TimesSquare Capital U.S. Mid Cap Growth Strategy made the following comment about Aptiv PLC (NYSE:APTV) in its Q3 2023 investor letter:

“In Consumer-oriented sectors, we lean towards value-oriented or specialty retailers, franchise models, as well as premium brands. We have seen challenges this quarter stemming from falling consumer confidence and sentiment measures. Another benefit came from Aptiv PLC (NYSE:APTV), a supplier of electronic automotive technology for safety and entertainment systems. Second quarter revenues, operating margins, and earnings topped consensus estimates. Its -3% return outpaced the index sector average of -6%.”

3. The Goodyear Tire & Rubber Company (NASDAQ:GT)

Number of Hedge Fund Holders: 36

The Goodyear Tire & Rubber Company (NASDAQ:GT) is a global manufacturer and distributor of tires and related products. The company offers a diverse range of tires for multiple vehicles and applications under different brand names, including Goodyear, Cooper, and Dunlop. Additionally, Goodyear provides retread services for truck, aviation, and off-the-road tires, manufactures tire retreading materials, sells chemical products, and offers automotive and commercial repair services. It is one of the best automotive stocks to invest in. 

On December 4, HSBC started coverage of The Goodyear Tire & Rubber Company (NASDAQ:GT) with a Buy rating, emphasizing the company’s potential to surpass expectations due to a perceived low performance threshold. The analysts, Wesley Brooks and Laisha Zaack, anticipate that Goodyear could benefit from a margin upcycle and deleveraging, making for a compelling combination even without factoring in potential cost savings. Additionally, the analysts highlighted the company’s attractive valuation as a positive factor.

According to Insider Monkey’s third quarter database, 36 hedge funds were bullish on The Goodyear Tire & Rubber Company (NASDAQ:GT), compared to 33 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 4.2 million shares worth $52.3 million. 

Here is what ClearBridge Small Cap Value Strategy has to say about The Goodyear Tire & Rubber Company (NASDAQ:GT) in its Q3 2022 investor letter:

“We exited a number of stocks during the period, including Goodyear Tire & Rubber (NASDAQ:GT). We sold our position in Goodyear due to the cavalcade of concerns including the company’s elevated debt levels, inflationary pressures from higher input prices, continued manufacturing challenges in the auto industry and complications with the company’s manufacturing volume. With substantial exposure to the automotive industry through other portfolio holdings, we elected to consolidate our exposure within those higher-conviction holdings.”

2. AutoZone, Inc. (NYSE:AZO)

Number of Hedge Fund Holders: 44

AutoZone, Inc. (NYSE:AZO) is a retail and distribution company that operates in the United States, Mexico, and Brazil. The company specializes in providing automotive replacement parts and accessories for cars, SUVs, vans, and light trucks. AutoZone’s product offerings include new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. It is one of the top automotive stocks to invest in. 

On December 20, 2023, AutoZone, Inc. (NYSE:AZO) announced that its board has approved the repurchase of an extra $2 billion worth of its common stock as part of its existing share buyback initiative.

According to Insider Monkey’s third quarter database, 44 hedge funds were bullish on AutoZone, Inc. (NYSE:AZO), compared to 52 funds in the prior quarter. Israel Englander’s Millennium Management is a prominent stakeholder of the company, with a position worth $138.2 million. 

RGA Investment Advisors made the following comment about AutoZone, Inc. (NYSE:AZO) in its Q4 2022 investor letter:

“Below is a chart of Alphabet’s (NASDAQ:GOOG) P/E ratio plotted against AutoZone, Inc. (NYSE:AZO). Any number of examples between large cap tech companies and more mature companies could illustrate this very same point, but we find this specific case most interesting because of its history.

Note that in late 2014/early 2015 these multiples crossed one another. The relative harmony between Alphabet and Autozone lasted for just shy of a year at that time, before Alphabet’s shares surged and Autozone’s shares slumped. This relationship need not matter for markets, though we think there is some signal for investors. Autozone today trades at the highest multiples of its recent history, while Alphabet trades at its lowest. Meanwhile, despite growth estimates dropping considerably at Alphabet and appreciating modestly at Autozone, Alphabet will outgrow Autozone by a wide margin over the next five years…” (Click here to read the full text)

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

Number of Hedge Fund Holders: 45

O’Reilly Automotive, Inc. (NASDAQ:ORLY) is a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States and Mexico. The company provides a wide range of new and remanufactured automotive hard parts, maintenance items, accessories, and professional service provider equipment. It is one of the best automotive stocks to invest in. 

On November 16, 2023, O’Reilly Automotive, Inc. (NASDAQ:ORLY) announced that its board has passed a resolution to increase the authorization amount for its share repurchase program by an extra $2 billion. This brings the total authorization under the program to $25.75 billion. The additional $2 billion authorization is valid for a three-year period, starting from November 16, 2023.

According to Insider Monkey’s third quarter database, 45 hedge funds were bullish on O’Reilly Automotive, Inc. (NASDAQ:ORLY), compared to 52 funds in the prior quarter. Charles Akre’s Akre Capital Management is the largest stakeholder of the company, with 1.05 million shares worth $959.2 million. 

Wedgewood Partners stated the following regarding O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its fourth quarter 2023 investor letter:

“O’Reilly Automotive, Inc. (NASDAQ:ORLY) was also a bottom contributor to portfolio performance. The Company reported +11% sales growth for the quarter, driven by a +17% increase in sales to professional service providers, leading to +12% growth in operating income and +17% increase in earnings per share. The Company – true to its long capital allocation culture – has aggressively bought back shares over the past 12 months. O’Reilly Automotive’s professional sales segment continues to dramatically outpace its publicly traded competitors. The Company has a mostly singular focus on the United States, whereas several of its competitors have diverted their attention away from the large and fragmented U.S. professional market, toward non-U.S. or non-automotive markets. In the short-term, investors are focused on the mild weather that has unfolded during the late fall and early winter of 2023. Mild weather often leads to temporary slowdowns in sales growth for auto parts, but we would look to take advantage of that because O’Reilly’s long-term competitive positioning and extraordinary returns on capital are well-entrenched.”

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