O'Reilly (ORLY) Benefited from Tariff on Auto Imports

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Value Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 500 Index declined by -4.3% in Q1 2025 due to a tariff war and a shift away from AI-related tech stocks. Amid the tech-led sell-off, the benchmark, the Russell 1000 Value Index, outperformed its growth counterpart in the quarter. Against this backdrop, the strategy underperformed the benchmark in Q1. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, ClearBridge Large Cap Value Strategy highlighted stocks such as O’Reilly Automotive, Inc. (NASDAQ:ORLY). O’Reilly Automotive, Inc. (NASDAQ:ORLY) is a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories. The one-month return of O’Reilly Automotive, Inc. (NASDAQ:ORLY) was 0.03%, and its shares gained 40.01% of their value over the last 52 weeks. On May 19, 2025, O’Reilly Automotive, Inc. (NASDAQ:ORLY) stock closed at $1,393.90 per share with a market capitalization of $79.44 billion.

ClearBridge Large Cap Value Strategy stated the following regarding O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its Q1 2025 investor letter:

"In consumer discretionary, tariffs on auto imports created a favorable backdrop for the auto repair market. This benefited auto parts retailers likeO’Reilly Automotive, Inc. (NASDAQ:ORLY), given its leadership position and the relatively inelastic demand for its products. The company should also benefit from weakened competitors like Advance Auto Parts and Napa, both of which have much less margin to absorb cost inflation if O’Reilly decides to be more aggressive in the marketplace."

O’Reilly Automotive, Inc. (NASDAQ:ORLY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held O’Reilly Automotive, Inc. (NASDAQ:ORLY) at the end of the fourth quarter, compared to 41 in the third quarter. While we acknowledge the potential of O’Reilly Automotive, Inc. (NASDAQ:ORLY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered O’Reilly Automotive, Inc. (NASDAQ:ORLY) and shared TimesSquare Capital U.S. Focus Growth Strategy's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.