AAP - Third Point - Advance Auto Parts: Worldpac Sale A Near-Term Catalyst To Unlock Significant Value
2024-05-02 11:00:00 ET
Summary
- We initiated a position in Advance Auto Parts in Q4 2023 at an attractive entry point.
- Key to the turnaround is CEO Shane O’Kelly, who is known as a disciplined, motivated, and proven leader with experience in similar industries.
- While the long-term opportunity here lies in fixing the core retail business, the upcoming sale of Worldpac is a near-term catalyst that should unlock significant shareholder value.
- Post the Worldpac sale, RemainCo’s blended box model will look like O’Reilly and AutoZone, but at fraction of the valuation.
The following segment was excerpted from this fund letter.
Advance Auto Parts ( AAP )
We initiated a position in Advance Auto Parts in Q4 2023 at an attractive entry point, after the third consecutive guidance cut of the year overshadowed new CEO Shane O'Kelly's strategic plans to course correct the business. Advance operates in the highly attractive auto aftermarket industry, which has proven resilient in various consumer cycles and is currently supported by increasing vehicle complexity, a growing and aging carpark, and supply and affordability challenges....
Third Point - Advance Auto Parts: Worldpac Sale A Near-Term Catalyst To Unlock Significant Value