Stock took a serious downgrade today. Selloffs are inevitable. Dump
It before it’s too late!
14 replies (most recent on top)
Junk Business plan + Junk parts = Junk Stocks!!
You reap what you sow....
Unless some story comes out or some company news, my bet is nothing changes much with the stock until the quarterly results get announced in November.
Here comes another dive!
They will do as they have always done and dig a deeper hole. DM's and CAM's get more stores. Experienced employees get cut to save on payroll. GM's get less payroll to work with. Benefits will be reduced while premiums increase during insurance open enrollment. Speed Perks will give away more margin online and irritate commercial customers. Management will continue to recruit those from snack companies, failed electronic and office supply firms, and the board will keep demanding change from those unable to even identify the root problem.
AAP RIP 2018....you're a goner!!
Advance Auto Parts Inc (NYSE:AAP) generated a below-average return on equity of 12.63% in the past 12 months, while its industry returned 13.12%. AAP's results indicate a relatively inefficient operation to its peers.
Sounds like a lot more Cost Cuts and/ or additional Debt is needed. What choice do you think will AAP make to be competitive?
Stock is 'washed out' over the near term
That is what the chairman of the board would like. It is the only way he will make money on AAP.
If someone where to buy AAP such as Amazon, Walmart...wouldn't AAP's value go up?
Below was supposed to say Orielly, and bought. Sorry for spell error, typed in a huryy
Orderly just boutique 6 stores in Pa. Altoona area and surrounding areas. Hopefully they come toward central Park soon!!!!!!.
No wonder the title of the analysis report is more bad news for AAP. Ultimately, the risks outweigh the potential, hence the downgrade.
O'reilly has been opening a lot of new stores in Florida, 4 stores alone in my area over the last 3-4 years. The stupidity of this is the population has not grown to accept all the auto parts stores that are here. This shows too many companies are competing for a limited number of customers and that the customer base is shrinking. Younger people do not know or want to work on their own cars, and the older customers are dying off. I see no need for this many brick and mortar auto parts stores since those in the know get better deals shopping online.
They also note that rival O'Reilly is planning to double its store penetration in Florida, a state that represents 8% of Advance’s total store base, ramping up competition.
Notes From Downgrade:
We are concerned that three of the initiatives Advance is pursuing to improve EBIT% and ROIC could lead to market share losses if not properly executed. These include: i) tightening the policy for accepting product returns, ii) increasing the number of stores an Advance district manager must supervise to ~15 stores compared to just 10 to 11 for O’Reilly and AutoZone, and iii) reducing gross inventory level by 20%.
A financial buyer for AAP is unlikely, as the additional debt could lead to the loss of its investment grade rating – effectively ending the use of its vendor finance inventory model. Second, strategic buyers such as O’Reilly (ORLY), AutoZone (AZO), and NAPA are unlikely buyers given the significant store overlap within two-mile trade areas (50% for ORLY, 59% for AZO, and 64% for NAPA). However, we do believe a non-traditional strategic buyer such as Amazon or Icahn Enterprises might take a look at Advance.