Stock Strategist: We See Rising Returns at Genuine Parts Despite Industry Weakness

[Morningstar Logo]( [Company Site]( [Company News]( [Membership]( [Portfolio]( [Stocks]( [Options]( [Funds]( [ETFs]( [Markets]( [Tools]( [Personal Finance]( [Discuss]( Stock Strategist We See Rising Returns at Genuine Parts Despite Industry Weakness We think the slump in auto-parts retail is cyclical in nature rather than structural. [tab_bar] by Zain Akbari, CFA | 7/26/2017 2:30:00 PM As a top distributor of automotive and industrial parts, [Genuine Parts]( [GPC]( benefits from industry dynamics favoring its scale-enabled service levels. We believe the company will use its cost advantage to boost sales through its ability to offer a wide variety of parts on short order, building inventory and cost leverage as sales rise while fortifying brand value in a way that subscale peers cannot economically replicate. We expect these advantages to outweigh industry-driven deterioration in the company’s office product unit. Aftermarket auto-parts retailers serve do-it-yourself and professional clients. The faster-growing latter category depends on high levels of part availability and rapid delivery to turn repair bays and avoid costly service queue reshuffling. Both categories have benefited from rising miles driven and average vehicle age, along with low unemployment. Genuine Parts--mostly via its NAPA brand--stands to benefit thanks to its infrastructure, enabling it to economically offer a vast catalog with quick delivery from a distribution center in case a part is not stocked in store. To read more, click [here](. Sponsored Links [Buy a Link Now]( New: ETF Managed Portfolios Center On [MorningstarAdvisor.com]( Tap into the industry's best source of information on ETF strategies for financial advisors. See key performance data, screen for specific strategy attributes, and learn more about this fast-growing area of the investment marketplace. [Click to get started](. Free Issue | Morningstar's Stock Newsletter >> Morningstar StockInvestor is celebrating more than 10 successful years of high-quality stock investing. Its two real-money portfolios have outperformed the S&P 500 since 2001. [Get new ideas for the core of your stock portfolio]( ). Search Most Recent Articles [The 4 Smallest Medalists]( [It's Groundhog Day (Again) for the U.S. Fund Industry]( [Is a Traditional 401(k) or Roth 401(k) Right for You?]( Latest Analyst Reports [Newmont Mining]( [AK Steel Holding]( [Seagate Technology]( [Werner Enterprises]( [Hasbro]( ABOUT OUR EMAIL TO UNSUBSCRIBE this email address to the Stock Strategist newsletter, please click "reply" and then click "send." This will unsubscribe only this email address to this specific newsletter. All subscription changes will take effect within one business day. Replies are not read by individuals, so please do not use this for queries about Morningstar.com. If you have questions about Morningstar.com or your membership, send a note to [joe@morningstar.com](mailto:%20joe@morningstar.com). ABOUT OUR PRIVACY POLICY Please [click here]( to learn about Morningstar's privacy policy. (c) Copyright 2017. Morningstar, Inc. 22 West Washington Chicago, Illinois, 60602 All rights reserved.