Five Auto Parts Suppliers That Hedge Funds Love

#3 WABCO Holdings Inc. (NYSE:WBC)

– Hedge Funds with Long Positions (as of June 30): 35

– Value of Hedge Funds’ Holdings (as of June 30): $1.27 Billion

The number of hedge funds tracked by us that had long positions in WABCO Holdings Inc. (NYSE:WBC) increased by three during the second quarter, though the aggregate value of their holdings in it fell by $32 million. With ownership of over 3.23 million shares of WABCO Holdings Inc. (NYSE:WBC), investing legend Warren Buffett‘s Berkshire Hathaway continued to remain the largest shareholder of the company at the end of June among funds in our database. Shares of the truck parts supplier were beaten aggressively after the Brexit result owing to the high exposure it has to Europe, which accounted for 55% of its revenue in fiscal year 2015. However, the stock has had a stellar rally in the third quarter and  have gained 5% year-to-date. For its fiscal 2016 third quarter, analysts are expecting the company to report EPS of $1.48 on revenue of $701.93 million. For the same quarter last year, WABCO Holdings reported EPS of $1.39 on revenue of $643.6 million.

#2 O’Reilly Automotive Inc (NASDAQ:ORLY)

– Hedge Funds with Long Positions (as of June 30): 44

– Value of Hedge Funds’ Holdings (as of June 30): $1.46 Billion

Moving on, the ownership of O’Reilly Automotive Inc (NASDAQ:ORLY) among funds covered by us inched up by two and the aggregate value of their holdings in it jumped by 58.5% during the second quarter. Shares of the Missouri-based auto parts retailer recently made their lifetime high at $292.84 and are currently trading 8.24% in the green for 2016. Owing to the profitable growth the company has displayed over the past many years and a consistent rise in its stock price during that time, a lot of analysts consider O’Reilly Automotive Inc (NASDAQ:ORLY) to be among the best buy-and-hold stock for long-term investors. The 26 leading analysts who cover the stock currently have an average rating of ‘Overweight’ and an average price target of $307.75 on it, which represents a potential upside of 10% from its current trading price.

#1 Advance Auto Parts, Inc. (NYSE:AAP)

– Hedge Funds with Long Positions (as of June 30): 51

– Value of Hedge Funds’ Holdings (as of June 30): $2.35 Billion

Advance Auto Parts, Inc. (NYSE:AAP) continued to remain the most popular auto supplier stock at the end of June among hedge funds tracked by Insider Monkey. During the second quarter, the number of funds covered by us that were long the stock increased by five while the aggregate value of their holdings in it advanced by 48%. Interestingly, Advance Auto Parts, Inc. (NYSE:AAP) is also the only stock covered in this list that is currently trading in the red for 2016, down by 2.5%, owing partially to the decline it has witnessed since August 16, when the company reported its second-quarter numbers. While analysts had expected EPS of $2.12 for that period, Advance Auto Parts reported EPS of only $1.90. Nonetheless, the revenue of $2.26 billion was slightly better than analysts’ expectation of $2.24 billion. Due to the lower comps being reported by the company, which in effect is driving its margin lower, and the steep trailing P/E of 23.70 at which the stock is trading currently, many analysts have lowered their price target on the stock, including RBC Capital Markets, which last month lowered it to $174 from $180 while keeping their rating unchanged at ‘Outperform’.

Disclosure: None