Genuine Parts (GPC) is a large international retailer and distributor of automobile parts. GPC operates close to 6,000 NAPA stores in the US, over 2000 Alliance Automobile Stores in Europe, and 529 GPC stores in Europe and Australia. The company also operates an industrial products division in North America and Australia/Asia.

GPC has always been a favorite of conservative investors for years due its strong balance sheet and consistent earnings. The company came out of the pandemic in great shape, and with the help of a price increase improved EPS from $5.69 in 2019 to $8.34 last year. However, the company had a disappointing third quarter this year, with same store sales flat as the company struggled with product availability. As a result, the stock tumbled from over $150 a share to its current price.

Still, GPC continued to improve efficiency, which expanded margins, and the company expected to earn from $9.20 to $9.30 this year, and even if the economy slows, $9.75 a share is possible next year as the company looks to fix the product availability issue. At 13.3X this estimate and a dividend yield of 2.9%, GPC is very attractively valued.

Buy GPC under $136 as I target $160. Keep in mind the stock was priced at $180 in December. Genuine Parts will be in our core holding portfolio.