SOURCE: Rothman Research

Rothman Research

March 08, 2010 09:14 ET

Weak Economy Favors Auto Parts Stores

JOHANNESBURG, SOUTH AFRICA--(Marketwire - March 8, 2010) -

"Cost-awareness amongst automobile consumers have lead many to invest in servicing and repairs of their already owned car rather than purchasing a new one, due to the effect of a weakened global economy," says financial analyst Bradley McCoy of Rothman Research. This means bigger gains to services sector stocks. O'Reilly Automotive Inc. (NASDAQ: ORLY) and AutoZone Inc. (NYSE: AZO) are two examples of stocks doing better despite the weak economy since last year.

*These reports are a must read for every investors trading on the services sector and can be downloaded absolutely free at or

O'Reilly Automotive Inc. is a publicly traded chain of Auto Parts stores that started with one store in Springfield, Missouri in 1957. It has since grown to more than 3,400 stores in 38 states. The corporate headquarters of O'Reilly is located in Springfield.

The company nearly doubled in size and boosted its presence on the West Coast with the acquisition of CSK Auto in mid-2008. The growing base of stores resulted to strong sales and sent profit soaring in the fourth quarter. O'Reilly earned $71.9 million or 52 cents per share, up from $42.7 million, or 32 cents per share, in the same quarter of last year.

As the company expanded its operations from 3,285 stores and 18 distribution centers at the beginning of the year to 3,421 stores and 20 distribution centers by the end, O'Reilly's sales grew to 36 percent that is $4.85 billion. O'Reilly CEO Greg Henslee says, "We are looking forward to 2010, we see consumer concerns over high unemployment and a challenging macro environment as signs that our customers will continue to maintain their current vehicles and, therefore, drive demand in our industry."

For more information on O'Reilly Automotive Inc., visit our web site at

AutoZone Inc. operates as a specialty retailer and distributor of automotive replacement parts and accessories. Its stores offer various products primarily to do-it-yourself customers for use in cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products.

AutoZone has been reporting solid gains since last year. The company is having double digit EPS growth for 14 consecutive quarters, which was propelled by a 565,000 share repurchase during the quarter. Over the long run, the continued improvement in operational performance has created tremendous value for shareholders.

The full research report to AutoZone is available for download at free of charge. Get the latest updates on your preferred stocks while you at it.

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