Is Advance Auto Parts (AAP) Stock Suitable for Value Investors?
Zacks Investment Research | Jan 02, 2022 09:30PM ET
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Advance Auto Parts (NYSE:AAP), Inc. here >> )
Meanwhile, the company’s recent earnings estimates have been mixed at best. The current quarter has seen four estimates go higher in the past sixty days compared to two lower, while the full year estimate has seen eight upward and one downward revision in the same time period.
As a result, the current quarter consensus estimate has inched lower by 0.5% in the past two months, while the full year estimate has increased 4.2%.
This somewhat mixed trend is why the stock has just a Zacks Rank #3 (Hold) and why we are looking for in-line performance from the company in the near term.
Bottom Line
Advance Auto Parts is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Moreover, a strong industry rank (Top 5% out of more than 250 industries) further supports the growth potential of the stock. In fact, over the past three years, the industry has outperformed the broader market, as you can see below:
However, with a Zacks Rank #3, it is hard to get too excited about this company overall. So, value investors might want to wait for estimates and analyst sentiment to turn around in this name first, but once that happens, this stock could be a compelling pick.
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