by Wayne Whicher

Created on: April 23, 2009   Last Updated: April 27, 2009

New investment trends are difficult to spot and identify before the stocks in that market area increase in value. Famous investor Warren Buffet is often saying that investors should research and invest in what they know.

An up and coming market segment that bears close inspection is the auto repair industry. As car makers continual to have financial difficulties, and the economy continues to stagnate, numerous individuals will put off buying new cars. This will result in the current vehicles getting older and needing more repair. The auto repair companies, auto parts suppliers, and the secondary automotive industry such as tire companies will see a renewed growth in their industry.

This market up tick may be similar to the one that we have experienced in the previous few years in the cruise line industry. Similar logic applies. The baby boomer generation which makes up a large percentage of the population was getting to retirement age and were going to cruise more in the future. Cruise line companies, represented by such industry names as Carnival Corporation, stock symbol (CCL) and Royal Caribbean Cruises (RCL) have seen solid growth over the past few years.

Apply the logic of anticipating the cruise line market to the automotive repair industry. Where will consumers be spending more of their money in the near future? More money spent will enhance revenues and profits of these previously down trodden automotive companies.

Four industry leaders that bear more research include Advance Auto Parts, Inc (AAP), Autozone Inc (NEV), O'Reilly Automotive (ORLY), and Pep Boys (PBY).

Advance Auto Parts (AAP) is trading in the $40 dollar range and has a market capitalization of 4.2 Billion dollars. The company operates as a retailer of automotive parts, accessories, and maintenance items to do-it-yourself and do-it-for-me customers in the automotive after market industry. It has been in business since 1929.

Pep Boys (PBY) has a similar market focus and they sell mainly automotive repair and maintenance parts. Additional sales of automotive tires, batteries and new and remanufactured parts for vehicles rounds out their offering. Unlike (AAP), Pep Boys only has a market cap of 435M which implies a lot of room for growth.

The giant market cap of Autozone Inc (NEV) and O'Reilly Automotive (ORLY) respectively 9.0B and 5.1B make the two companies more diverse but also perhaps less adaptive to changes in the marketplace.

Of the four companies, all are trading near their 52 week highs, with Pep Boys still have the most upwards room to improve to reach it's previous year high point.

Coverage was recently initiated on Advance Auto Parts by Longbow Research Firm. Advance was also quoted in a recent article done covered on smartmoney.com as one of the bright spots in the auto industry.

Other plays may be considered for the large auto makers such as Ford, Chrysler and GE. These stocks have taken a beating in previous years but may be poised for a marginal up tick as the their repair and parts divisions see increased orders.

Research for all the stocks and other similar ones can easily be conducted at many internet search engines by easily plugging in the stock symbol and reading the volumes of data and background information.

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