Should You Invest in Advance Auto Parts?

PHOTO CREDIT: Advance Auto Parts

OVERVIEW

Why You Should?

  1. Advance Auto Parts slightly benefits due to a weak economy. Consumers will not buy new cars and will cut costs on the maintenance of vehicles. Consumers will instead try to fix some small issues by themselves. This benefits the company’s sales and the company will be less affected during these tough times.
  2. Advance Auto Parts is one of the few large retailers that solely specialize in the auto parts industry. This benefits the company as consumers will require the assistance of employees who offer advice free of charge. This causes an increase in sales because consumers can buy the right parts which are not possible for any other regular retail company.

Why You Should Not?

  1. Advance Auto Parts faces competition from several other auto parts stocks like O’Reilly Auto Parts and AutoZone. Other companies like Walmart are also entering into this space. These companies might hurt the companies future growth.
  2. In the future, the economy looks to be coming slowly back to life after bottoming out during the pandemic. This will see a rise in new car sales. These newer cars will be tougher to maintain and will require traditional auto shows for any work. These cars will also require less maintenance. This will negatively impact the company’s growth in the future.
  3. Though the economy is gaining strength, it is by no means any close to pre-pandemic levels. Maintaining a vehicle might not be the most essential action to take with money. This will negatively impact the company until the company can benefit from a stronger economy.

MY OPINION

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.