In a surprising move, investment firm Raymond James & Associates has significantly reduced its stake in Advance Auto Parts, Inc. This decision was revealed in a recent filing with the US Securities and Exchange Commission (SEC), indicating a decrease of 37.0% in the company’s holdings during the 1st quarter of this year. The fund now owns 263,339 shares of Advance Auto Parts, down from its previous ownership of 418,286 shares.
This change in ownership is undoubtedly significant as it raises questions about Raymond James & Associates’ confidence in Advance Auto Parts. With shares worth over $32 million at the end of the most recent quarter, the decision to sell off such a substantial portion of their stake speaks volumes about how they perceive the future profitability potential of this retail automotive parts and accessories provider.
To add to these developments, Advance Auto Parts recently announced that it will be paying out a quarterly dividend on July 28th to its shareholders. Investors who were recorded as such on July 14th will receive $0.25 per share as part of this dividend distribution plan. At an annualized dividend payout ratio (DPR) of 89.15%, investors can expect a yield of approximately 1.47%. However, one must consider whether this dividend is enough to entice current or potential investors given Raymond James & Associates’ decision to drastically cut their holdings.
This news follows a series of reports from equities research analysts who have been closely monitoring AAP stocks. The Goldman Sachs Group notably downgraded the stock from “buy” to “neutral,” substantially reducing their price target for AAP from $155.00 to just $82.00. Similarly, Argus lowered their rating from “buy” to “hold” back in March. This trend continues with DA Davidson dropping their price objective from $170.00 to $142.00 and setting it at “neutral.” Wells Fargo & Company joined the list, dropping their price target to $70.00 from $80.00 and rating the stock as “equal weight.” With 18 analysts rating the stock as a “hold” and only two assigning it a “buy” rating, it seems that confidence in Advance Auto Parts is wavering.
It is essential for investors to note that Bloomberg.com reports a consensus target price of $98.83 for AAP shares. However, with the recent downgrade from multiple research analysts and Raymond James & Associates’ significant sale of shares, this could be seen as an overly optimistic figure.
The situation surrounding Advance Auto Parts and its position in the market has certainly attracted attention. The market remains uncertain about the future prospects of its profitability and growth potential, reflected in Raymond James & Associates’ decision to divest a large portion of their holdings in the company. Additionally, many influential research analysts have lowered their ratings and targeted prices for AAP shares, further adding to a sense of perplexity within the industry.
As July continues to unfold, all eyes will be on Advance Auto Parts as investors weigh up the merits of maintaining their stake or seeking alternative opportunities elsewhere. It remains to be seen whether the current dividend payout will be enough to satisfy shareholders or if further measures are required to restore confidence in this once-prominent player in the retail automotive industry.
Institutional Investors Increase Stakes in Advance Auto Parts, Showing Confidence in Company’s Future
Advance Auto Parts, Inc. is a popular choice among investors, as several institutional investors have recently increased or reduced their stakes in the stock. One such investor is Allspring Global Investments Holdings LLC, which has increased its holdings in the company by an impressive 156.7% in the first quarter. With an additional 69,816 shares purchased during the last quarter, Allspring Global Investments Holdings LLC now owns a total of 114,383 shares valued at $13,910,000.
National Bank of Canada FI also boosted its position in Advance Auto Parts by 42.0% during the same period. With an additional 2,494 shares acquired, National Bank of Canada FI now owns 8,434 shares valued at $1,026,000.
Another institutional investor that saw a significant increase in its position is Mutual Advisors LLC with a boost of 15.7%. They now own 1,936 shares valued at $235,000 after purchasing an additional 262 shares.
Thrive Wealth Management LLC took advantage of the favorable market conditions and purchased a new position in Advance Auto Parts valued at approximately $227,000.
Diversified Trust Co also increased its position by 8.2% during the first quarter. They now own 7,995 shares valued at $972,000 after acquiring an additional 605 shares.
It is worth mentioning that these institutional investors and hedge funds own a staggering 91.32% of Advance Auto Parts’ stock.
In other news related to Advance Auto Parts’ shareholders and directors’ activities, Director Carla Jean Bailo made two significant purchases of company stock this year. On June 7th alone she purchased a total of 500 shares at an average price of $65.90 per share with a transaction value of $32,950.
Director Douglas A. Pertz also joined in on the action and acquired an impressive 4,575 additional shares on June 12th. With an average cost of $66.02 per share, the total value of his transaction amounted to $302,041.50.
These insider activities show a strong level of confidence in the company’s future and indicate that its shareholders and directors believe in its long-term success.
Furthermore, Advance Auto Parts recently announced a quarterly dividend payment scheduled for July 28th. Investors who are on record as of July 14th will receive a dividend of $0.25 per share. This represents an annualized dividend of $1.00 with a yield of 1.47%.
In terms of stock performance, shares of Advance Auto Parts opened at $68.09 on Thursday, highlighting the company’s stability even during uncertain times. The company boasts a debt-to-equity ratio of 0.68 and quick and current ratios of 0.24 and 1.24 respectively.
With a market capitalization of $4.05 billion, an attractive price-to-earnings ratio (P/E) of 10.12, and a beta value indicating moderate volatility at 1.11, Advance Auto Parts remains an appealing investment option for many investors.
However, it is important to note that Advance Auto Parts missed the consensus estimate for its quarterly earnings results on May 31st by reporting only $0.72 EPS instead of the expected $2.60 EPS – resulting in a difference or shortfall ($1.88). Despite this setback, the company maintains a return on equity (ROE) percentage as high as 22.67% and a net margin rate of 3.61%. The company generated revenue amounting to $3.42 billion for the quarter compared to analyst estimates of approximately $3.43 billion.
Based on predictions made by sell-side analysts, it is believed that Advance Auto Parts will post around six earnings per share (EPS) for the current fiscal year.
In conclusion, Advance Auto Parts, Inc. remains a popular choice among institutional investors, as evidenced by the recent increases in their stakes. Stock purchases by directors further demonstrate the confidence they have in the company’s future. With an upcoming dividend payment and steady stock performance, Advance Auto Parts proves itself to be a reliable investment option despite the temporary setback in its quarterly earnings report.