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O'Reilly to Raise Share Buyback Program, Buys Auto Assets

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O'Reilly to Raise Share Buyback Program, Buys Auto Assets

O'Reilly (ORLY) increases share repurchase program by $1 billion.

O’Reilly Automotive, Inc. ORLY announced that its board of directors approved rise of $1 billion in its share repurchase program. This brought the total share repurchase authorization to $11.75 billion. Further, this auto parts retailer agreed to purchase all the auto parts-related assets of automotive parts supplier Bennett Auto Supply, Inc., based in Pompano Beach, FL.

O’Reilly pursues an aggressive share-repurchase policy, which continues to boost earnings per share. In third-quarter 2018, the company repurchased 0.9 million shares for $416 million, the average price being $306.22 per share.

Subsequently, from the end of third-quarter 2018 to the date of the earnings release on Oct 24, it purchased additional 0.2 million shares for $68 million.

This new $1-billion share repurchase authorization is effective for a three-year period. Before this hike in share buyback, in February 2018, O’Reilly raised the share repurchase authorization amount by additional $1 billion to $10.75 billion.

On the other hand, the purchase of Bennett assets is likely to be completed by the end of 2018. Over the past six decades, the Bennett family has successfully built its business, which aims to provide excellent customer service. The deal positions the company for growth in Florida by opening up huge opportunities.

Zacks Rank & Key Picks

Currently, O’Reilly carries a Zacks Rank #2 (Buy). Over the past six months, shares of O’Reilly have outperformed the industry it belongs to. Over this time frame, shares of the company have grown 31%, whereas the industry increased 21%.

A few other top-ranked stocks in the auto space are Allison Transmission Holdings, Inc. ALSN, Advance Auto Parts, Inc. AAP and AutoZone, Inc. AZO. While Allison Transmission sports a Zacks Rank #1 (Strong Buy), both Advance Auto Parts and AutoZone carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Over the past six months, shares of the company have surged 10.9%.

Advance Auto Parts has an expected long-term growth rate of 12.3%. Over the past six months, shares of the company have risen 51.9%.

AutoZone has an expected long-term growth rate of 12.2%. Over the past six months, shares of the company have risen 22.2%.

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O'Reilly Automotive, Inc. (ORLY) : Free Stock Analysis Report
 
Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report
 
AutoZone, Inc. (AZO) : Free Stock Analysis Report
 
Allison Transmission Holdings, Inc. (ALSN) : Free Stock Analysis Report
 
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