Analyst Favorites With Strong Buyback Activity: O'Reilly Automotive Ranks As A Top Pick
Investors are often keenly interested in knowing which companies are buying back their own stock, because companies often will only make such a move if they feel their stock is undervalued. O'Reilly Automotive, Inc. is a company with strong buyback activity that is also considered a compelling buy by analysts; a bullish investor could take this to mean that sharp analyst minds came to the same bullish conclusion as the company itself that the stock is a good value, and therefore the stock should do well in the future.
Analysts studying companies buying back their own stock will also factor into their analysis that future earnings will now be spread over a smaller share count, thereby increasing the per-share earnings the remaining shares will enjoy, versus what that same number would have been absent the stock buyback activity.
According to the ETF Finder at ETF Channel, ORLY makes up 15.26% of the PowerShares DWA Consumer Cyclicals Momentum Portfolio ETF (PEZ) which is trading lower by about 1.4% on the day Wednesday.
ORLY operates in the Auto Dealerships sector, among companies like AutoZone, Inc. (AZO) which is down about 0.6% today, and Carmax Inc. (KMX) trading higher by about 0.6%. Below is a three month price history chart comparing the stock performance of ORLY, versus AZO and KMX.