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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.

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