Tuesday's IBD 50 Stocks To Watch pick, O'Reilly Automotive, is breaking out above a new buy point during today's stock market rally. ORLY shares rallied 2% midday Tuesday, trading in the 5% buy area.
Stocks To Watch: O'Reilly Automotive
Missouri-based O'Reilly Automotive operates more than 5,500 automotive parts stores across the United States.
O'Reilly reported earnings on Feb. 9, and earnings jumped 41% year over year to $7.64 per share on revenue of $3.29 billion, up 16% vs. the year-ago period.
"We are also encouraged by the resilience of the strong sales trends in our business we've moved — as we move further past the injection of government stimulus into the economy and believe that economically consumers remain relatively healthy with employment increasing and miles driven steadily recovering," commented Chief Executive Officer Greg Johnson in the conference call."
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O'Reilly Auto's IBD Stock Ratings
O'Reilly ranks No. 21 in the IBD 50. The computer-generated list of leading growth stocks highlights companies with strong relative price strength and top-notch fundamentals.
Among the stocks to watch in the retail auto parts space, ORLY shows a strong 95 out of 99 Earnings Per Share Rating with a best-possible A SMR Rating, according to IBD Stock Checkup. The EPS Rating tracks a company's short- and long-term earnings performance. The SMR Rating analyzes a company's sales, margins and return on equity, and offers a letter grade from A (the best) to E (the worst).
IBD Stock Checkup also shows that ORLY stock has a 96 out of a maximum 99 IBD Composite Rating. The Composite Rating helps investors easily gauge the quality of a stock's fundamental and technical metrics.
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ORLY Stock Eyes New Buy Point
O'Reilly stock is breaking out past a cup with handle's 687.33 buy point, according to IBD MarketSmith chart analysis. O'Reilly is trading in the 5% buy area that tops out at 721.70.
Bullishly, the stock's relative strength line is already at new highs. This offers a clue of extreme strength especially during periods of significant market weakness. The RS line measures the stock's price performance vs. the S&P 500.
However, keep in mind that current stock market conditions should keep investors largely in cash. A stock market correction is not an ideal time to aggressively buy breakouts.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.
