Spare-parts makers weather auto storm

AutoZone Inc. and Advanced Auto Parts Inc., the top two auto parts retailers, have thus far escaped the carnage affecting much of the auto industry, as investors appear to believe their fortunes are more secure than those of the auto makers, spare parts makers and automotive retail chains that rely on selling new cars.

With U.S. auto sales at their lowest levels in more than a decade, auto-parts chains stand to gain as consumers choose to fix their old vehicles instead of buying new ones.

Highlighting the countercyclical nature of auto-parts retailers amid rough sledding in the new-car market, AutoZone is closing in on being worth $1 billion more than General Motors Corp., which on Thursday saw its stock fall 11% to its lowest level since at least the mid-1970s. In contrast, AutoZone shares were among the few gainers on Wall Street, rising 2.6% to $114.67 thanks to news of a new $500 million stock-buyback plan.

In contrast to GM and Ford Motor Co., which have seen their shares fall 54% and 25%, respectively, so far this year, AutoZone shares are down just 4.4%. GM's market capitalization now sits at about $6.5 billion, well below $7.3 billion for AutoZone.

Advance Auto Parts has fared better, gaining 4% year-to-date.

AutoZone's rally occurred amid the buyback news and word that the company would increase its leverage levels. Moody's Investors Service noted AutoZone remains solidly investment grade, with a market-leading franchise that "is strengthening despite the harsh macroeconomic environment."