If you care about auto parts retailers – w a measly $40bn in cap – then you should know that Hedgeye is going there…and we’re going all-in. It’s pretty safe to say that the Auto Parts Aftermarket Retail space is one of the battlegrounds in retail today. Stocks look binary to me. I could give you my initial bias (long) – but that is completely irrelevant bc the stocks have only gone through 3 stages of our 6-stage vetting pyramid.
There’s been a fierce debate, and we haven’t been part of the debate. That miffs me big. Now with a bigger/upgraded team, we’re pumping our resources to where they’re needed. My plan is to take it to a new level – that’s the plan at least. And I don’t deviate from plans unless better money-making plans come into play.
Next Step in Our Research – Bifurcating customer behavior by micro-consumer type.
- In light of the Battleground (that I have a burn in my gut to fight on), we just completed and extremely thorough (and $$$, if I must say) survey across the consumer spectrum bifurcated by 10 different demos – incl MSA, DMA, FICO Score, DIY, DIFM auto part penetration across all consumer types, and where the greatest risk is for Amazonism – not to mention the greatest opportunity for partnering with Amazon to re-drive the business. This is a more detailed version of the data that helped us analyze incremental Prime acquisitions by FICO score (ie Prime going Sub-Prime – see chart below).
- We’re focusing on about a dozen categories, but one of definitely being Auto Parts Retail. We’ll dig deep into what’s REALLY going behind the scenes as to why in the world management doesn’t know why business is weak – and is likely being blamed on the wrong (i.e. the easy – Amazon) factors.
The Bankruptcy Daisy Chain. As a kicker, we’ve got the MSA overlap analysis as it relates to who has the best/worst overlap or protective footprint w everyone from Sears to Jimmy Bob’s Tire Warehouse. We’ll be diving into the bankruptcy trends of the primary and secondary suppliers to drill down how that will affect the major retailers. Ie, first guy struggles, next guy drops, etc…
This is our third outsourced survey on consumer spending trends in 18 months. I can assure you that it is not one of those ‘ask a hundred teens what brands they like’ surveys. We use the best survey company in the business, who takes all of our questions, ‘scientific-izes’ them, and unbiases what will naturally be leading questions based on the fact that asking questions in an unbiased way is simply not in the average Wall Street analyst’s skill set. We then combine with all our other sources to come up what we think is the truth, and what’s going on that management teams simply do not know the answer to. We’re doing this big, and are doing it right.
- The data worked like a charm earlier this year….with insight into all of Retail – everything from brake pads, yoga pants, furniture, bras, torque wrenches, video games, landscaping products, pain relievers and the other 480mm products you can buy on Amazon.
- All in we have millions of cells of data with unlimited queries…i.e. “what are fico trends by Prime subs BY CATEGORY, and which are using Amazon echo dots to tell the weather vs order ground beef and a new muffler, and where are incremental category shifts since our last two product.’
This will be a complex book on all of the auto parts retailers and the ecosystem – I’m pumped about it.
It’s my job to say ‘don’t miss it!’ But trust me folks… don’t miss this one. We’re going large to both create and redirect the debate in a way that many management teams won’t know the answers. At least that’s the plan…until the plan changes for the better.
Call Details
Time: Wednesday, December 13th at 2:00PM EST
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Confirmation Number: 13673468
Live Video Link: Will be Provided Prior to the Event
