O'Reilly Automotive Raises Share Buyback Program by $500M - Analyst Blog

O'Reilly Automotive Inc.'s ( ORLY ) board of directors recently sanctioned a $500 million increase in its share repurchase program, taking the total authorization to $4.5 billion. This approval is effective for a three-year period, starting Aug 13, 2014.

O'Reilly will be making open market purchases of the shares from time to time at prevailing market prices. The repurchases will depend on price, corporate requirements and overall market conditions. Also, the company holds the authority to increase, modify, renew, suspend or terminate this share repurchase program at any time, without prior notice.

The increase in share repurchase authorization reflects O'Reilly's strong liquidity position with cash and cash equivalents of $453.4 million as of Jun 30, 2014. In the first half of 2014, net cash flow from operations increased to $655.5 million from $439.4 million in the prior-year period.

O'Reilly pursues an aggressive share repurchase policy which continues to boost earnings per share. In Feb 2014, the company's board authorized an increase of $500 million in the share repurchase program, taking the total amount to $4 billion.

In the first half of 2014, O'Reilly repurchased 2 million shares for $300 million, translating into an average price of $148.21. Subsequent to the end of the second quarter and through Jul 23, 2014, the company repurchased an additional 0.6 million shares for $89 million, implying an average price of $152.03.

Since the inception of the share repurchase program in Jan 2011, O'Reilly has repurchased a total of 43.2 million shares for $3.74 billion, indicating an average price of $86.62.

O'Reilly is a prominent player in the automotive replacement parts and accessories industry. It currently carries a Zacks Rank #2 (Buy).

Some other stocks that are performing well in the auto industry include Lithia Motors Inc. ( LAD ), Pep Boys - Manny, Moe & Jack ( PBY ) and CarMax Inc. ( KMX ). Lithia sports a Zacks Rank #1 (Strong Buy) while the other two stocks carry a Zacks Rank #2.

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O REILLY AUTO (ORLY): Free Stock Analysis Report

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LITHIA MOTORS (LAD): Free Stock Analysis Report

PEP BOYS M M &J (PBY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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