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Stock Strategist Industry Reports

O'Reilly's in the Pole Position

We think its distribution network sets it up for success in the race for professional and DIY sales.

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We believe the market underappreciates the distribution advantage that the auto-parts retailers we cover-- Advance Auto Parts (AAP),  AutoZone (AZO),  Genuine Parts (GPC), and  O'Reilly Automotive (ORLY)--have over their smaller rivals. This strength is a key contributor to our narrow economic moat rating for these companies.

Sentiment remains fixated on the threat of disruption from Amazon (AMZN), which we believe is overstated, and we think a cyclical industry slump has made the buying opportunity more attractive.

Zain Akbari does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.