Taking a look at a recent 8-K filing, we can get a general idea of how the company is doing fundamentally and use that with technical analysis to formulate a starting opinion. These numbers are for the third quarter of 2016. Total sales for the third quarter decreased 2.0% to $2.25 billion as compared with total sales during the third quarter of fiscal 2015 of $2.30 billion. The company’s gross profit rate was 43.9% of sales during the third quarter as compare to 45.0% during the third quarter last year. Overall, the numbers appear to be stable, but let us take a look at the chart and see if price agrees.
The chart is currently on an up tick, after confirming there is a support area around the $140 mark. This is important for investors because this is where other investors agree that price is good enough to buy. Also, be sure to keep up with the news because many people trade on news reports. Right now I would let this ride a little bit and see if it breaks back into the all time high mark. The chart looks good and there or no red flags stopping me from saying this chart is solid.
Using predictive
technical analysis, we can analyze different prices and returns patterns and
diagnose historical swings to determine the real value of Advance Auto Parts. In general, sophisticated investors focus on analyzing Advance Auto stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Advance Auto's daily price indicators and compare them against related drivers such as
momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional
technical analysis and
fundamental analysis, we attempt to find the most accurate representation of
Advance Auto's intrinsic value. In addition to deriving basic predictive indicators for Advance Auto, many experienced traders also check how macroeconomic factors affect Advance Auto price patterns. Please read more on our
technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Advance Auto's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Advance Auto. Your research has to be compared to or analyzed against Advance Auto's peers to derive any actionable benefits. When done correctly, Advance Auto's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Advance Auto Parts.
How does Advance Stands against Peers?
Analyzing Advance Auto competition or peers my help you to expand the diversification possibilities of your existing portfolios and to get a better perspective on locking in new positions. Try to analyze the advantages of investing in traded instruments related to Advance Auto across multiple sectors and
thematic ideas. A good competitive analysis can cover a lot of different areas. But what areas to choose depends on who you are. The more exhaustive you are in your analysis, the more effective your competitive analysis will be. Check out
Advance Auto Competition DetailsAdvance Auto Gross Profit
Advance Auto Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Advance Auto previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Advance Auto Gross Profit growth over the last 10 years. Please check Advance Auto's
gross profit and other
fundamental indicators for more details.
Breaking down Advance Auto Indicators
Risks
Being in the retail industry has some risks that are the same across the board, but since this is an auto parts retailer, there are a few risks that stand out. The 10-K report has detailed information about all the risks the company may be impacted by. One to watch is if overall demand for products sold by the company’s stores, it could adversely affect the business and stock price. Being in this sector of the industry is difficult because yes, people will always need to fix their car but they may postpone it if they can. Also, be sure to watch the overall market conditions and this could be an indication of where the company may be headed.
Conclusion
This company could be a great addition to your portfolio as they recently has stable quarterly numbers along with a rising stock price. Be sure to consult a professional to ensure this is going to help your portfolio. I would do more research and keep an eye on this stock, especially if the economy is continuing to grow.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Advance Auto Parts. Please refer to our
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