Analyzing Earnings Growth, Valuation, and Capital Allocation Strategies

On this episode of Chit Chat Stocks, Ryan gives a research report on O'Reilly Automotive (ticker: ORLY), explaining why it is in his portfolio. We discuss:

(00:00) Introduction

(02:21) O'Reilly Automotive: A Specialty Retailer

(04:40) Customer Segments: DIY and Pros

(07:56) The Power of O'Reilly's Supply Chain Advantage

(11:08) Unit Economics and Sales Performance

(22:03) Industry Trends: More Cars, Older Vehicles

(25:58) The Risk of Electric Vehicles to O'Reilly

(27:19) The Long-Term Threat of Electric Vehicles

(27:48) A Consistent Capital Allocation Strategy

(29:18) Acquisitions: Adding Locations and Increasing Sales

(30:16) The Buyback Program: Driving Earnings Per Share Growth

(37:57) A Strong Corporate History and Culture

(46:13) Competitive Advantages: A Robust Digital Catalog and More

(48:59) Valuation: Reasonable and Predictable

(52:10) The Risk of Electric Vehicles and O'Reilly's Adaptability

*****************************************************

Subscribe to our YouTube channel: https://www.youtube.com/@ChitChatStocks 

Follow us on Twitter/X: ⁠https://twitter.com/chitchatstocks 

Follow us on Substack: ⁠https://chitchatstocks.substack.com/ 

*********************************************************************

Options are not suitable for all investors and carry significant risk.  Option investors can rapidly lose the value of their investment in a short period of time and incur permanent loss by expiration date.  Certain complex options strategies carry additional risk.  There are additional costs associated with option strategies that call for multiple purchases and sales of options, such as spreads, straddles, among others, as compared with a single option trade.

Prior to buying or selling an option, investors must read and understand the “Characteristics and Risks of Standardized Options”, also known as the options disclosure document (ODD) which can be found at: www.theocc.com/company-information/documents-and-archives/options-disclosure-document

Supporting documentation for any claims will be furnished upon request.

If you are enrolled in our Options Order Flow Rebate Program, The exact rebate will depend on the specifics of each transaction and will be previewed for you prior to submitting each trade. This rebate will be deducted from your cost to place the trade and will be reflected on your trade confirmation. Order flow rebates are not available for non-options transactions. To learn more, see our Fee Schedule, Order Flow Rebate FAQ, and Order Flow Rebate Program Terms & Conditions.

Options can be risky and are not suitable for all investors. See the Characteristics and Risks of Standardized Options to learn more.

All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Open to the Public Investing, Inc., member FINRA & SIPC. See public.com/#disclosures-main for more information.

*********************************************************************

FinChat.io is The Complete Stock Research Platform for fundamental investors.

With its beautiful design and institutional-quality data, FinChat is incredibly powerful and easy to use.

Use our LINK and get 15% off any premium plan: Finchat.io/chitchat

*********************************************************************

Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation.