Is There a Reason to Be Optimistic about Advanced Auto Parts, Inc. (AAP)?

Auto Retailers vs Automakers

The trend of automakers overtaking auto retailers, at least for the interim, caused analysts to predict a marginal increase in auto sales for the year. General Motors surged 60%, while Ford shot up by 56% since the dip in July of last year. Competitors Toyota and Honda have gained upwards of 25% since November 2012 due to the reduced power of the Yen. Will retailers be able to turn the tide and recover?

Will Advanced Auto Parts, Inc. (NYSE:AAP) Move Upward?

The specialty retailer of automotive parts may appear to be lagging behind in terms of sales, especially when compared to US automakers, but the practical entry point and the regrowth over the past fifty-two weeks means that AAP may still be able to catch up and rise in the market.

The lost ground, considering the stock’s history, indicates that it is not that difficult to recapture its glory from prior to the recession. It may still generate modest growth and profits through an eventual comeback, although it could take a while for Advanced Auto Parts to recuperate and join the fold of some of the most in-demand stocks in the industry today. Based on growth , however, Autozone and O ‘Reilly may appear to be better short-term buys because they outdrove Advanced in terms of stock decline and past performance; but for the long term, the latter’s plans for expansion may put it in the lead once again.

The article Is There a Reason to Be Optimistic about Advanced Auto Parts? originally appeared on Fool.com and is written by Rhodora Dagatan.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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