Holly molly did Advanced Auto get cracked down today.

mark's picture

Holly molly did Advanced Auto get cracked down today.

This is something that bears looking more closely at. Their operating cash flow increased 28%, investment CF decreased 13% and financing CF decreased 52%. Overall, CF increased from 14M to 122M.

AAP issues continue to adjusting their business to the "Amazon effect", their continuing focus on reducing financial leverage and integrating their large acquisition of Car Quest from several years back.

I don't believe the "Amazon effect" is a big as it is perceived. As a do it yourself person, you want to fix your car quickly. You are not going to order it. You want it now.

Their financial leverage of the acquisition was significant and it has been moving down. Will the increase in cash be used to further decrease financial leverage?

Acquisitions always take more effort to integrate than Wall Street usually expects. Every project I do at home always takes 3 times as long as expected.

At a 15 P/E now, it is much more reasonably priced.

I own it at much cheaper prices so I'm holding. Like I said recently, portfolio managers often don't have the patience to wait for long term benefits when short term costs are painful! Only time will tell, but I'm still on board.

Copyright 2017 Mark T. McLaren