Seeking Small-Cap Moats: Monro Muffler Brake
Monro's acquisition strategy is creating a virtuous cost-advantage cycle, but shares don’t come cheap at the moment, writes Morningstar’s Todd Wenning.
A few weeks ago, one of our 2002 Jeep's power windows failed and slid down into the door panel--in subzero Chicago weather, no less. Dreading what I knew would be an expensive repair, I thought, "Hey, I can hold the window up with some duct tape. It won't look that bad." My wife, clearly my smarter half, rejected that solution. So off to the repair shop I went.
No one likes expensive repairs and maintenance for a depreciating asset, but with the average age of cars on American roads climbing steadily higher to an estimated 11.7 years by 2017, according to IHS Automotive, we should expect to spend more time and money at the shop. Despite this apparent tailwind for the auto repair industry, the number of service bays has decreased in recent years due to dealership closures and fewer gas stations doing general repairs.
Todd Wenning does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.