Wedgewood Partners, an investment management company, released its “Wedgewood Partners Large Cap Focused Growth Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, Wedgewood Composite’s net return was -2.4% compared to the Standard & Poor’s -3.3%, Russell 1000 Growth Index’s -3.1%, and Russell 1000 Value Index’s -3.2% return for the same period. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Wedgewood Partners highlighted stocks like O’Reilly Automotive, Inc. (NASDAQ:ORLY) in the third quarter 2023 investor letter. Headquartered in Springfield, Missouri, O’Reilly Automotive, Inc. (NASDAQ:ORLY) is an automotive parts, tools, and supplies retailer. On October 20, 2023, O’Reilly Automotive, Inc. (NASDAQ:ORLY) stock closed at $907.06 per share. One-month return of O’Reilly Automotive, Inc. (NASDAQ:ORLY) was -2.85%, and its shares gained 18.04% of their value over the last 52 weeks. O’Reilly Automotive, Inc. (NASDAQ:ORLY) has a market capitalization of $54.658 billion.
Wedgewood Partners made the following comment about O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its Q3 2023 investor letter:
“O’Reilly Automotive, Inc. (NASDAQ:ORLY): The aftermarket auto parts industry is a retailer’s dream. Such dreams include: market share take opportunities for better operators in a fragmented industry, hard-to-replicate, competitively advantaged, distribution network effects, which increasingly get closer to customers; three decades of consistently positive annual sales comps; recession resistance; consistent new store openings; steady growth from multiple avenues; increasing profitability from company branded products; increasing long-lived “customers” (more and better cars on the road, more cars on the road past warranty and more miles driven); and reinvestment of cash back into the business at expanding margins. Net, net, witness O’Reilly’s stellar profitability profile:
Circa-2023 is delivering an extra gust to these tailwinds in the form of significantly higher financing for both new and used cars. Thus, U.S. automobile owners are literally forced to keep cars longer. As mileage racks up, maintenance and repair bills rack up too.
The U.S. Energy Information Administration (EIA) estimates that global fleet of internal combustion engine (ICE) light vehicles will peak in 2038. In addition, the EIA projects that electric vehicles (EVs) will account for +30% of the global fleet by 2050. We take such long-dated forecasts with a grain of salt, yet we do not disagree with the expectation that the auto parts industry has a long pathway of growth. The jury is still out on whether the technological advancements of EVs will render these vehicles mainstream in locales where the extremes of the four seasons are present. As of today, the annual maintenance cost of an EV is less than the cost of an ICE vehicle. That said, the undercarriages of EVs (brake calipers, brake pads, rotors, shocks, etc.) need to be repaired at similar intervals as ICE vehicles…” (Click here to read the full text)
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O’Reilly Automotive, Inc. (NASDAQ:ORLY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held O’Reilly Automotive, Inc. (NASDAQ:ORLY) at the end of second quarter which was 52 in the previous quarter.
We discussed O’Reilly Automotive, Inc. (NASDAQ:ORLY) in another article and shared TimesSquare Capital U.S. Mid Cap Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
