Investors need not fear owning shares of O’Reilly Automotive (ORLY) if the economy falters because the auto parts seller is the ideal stock when things turn down, said David Miller, portfolio manager for the Catalyst Insider Buying Fund. ‘People actually shop more for auto parts in a bad economy, not less, because they are buying fewer new cars and they need to fix their old cars more,’ said Miller. Miller added that O’Reilly merits its high price to earnings multiple of 24 times 2016 earnings because the company has been ‘growing revenue at a healthy clip and EPS at about 20% annualized.’ Miller’s Catalyst Insider Buying Fund is down 7% year-to-date, according to fund-tracker Morningstar. Shares of O’Reilly Automotive have risen 24% so far in 2015. He is also bullish on packaged food giant Mondelez International (MDLZ), which has seen its shares jump 16% year-to-date, helped in part by Pershing Square hedge fund manager Bill Ackman’s activism. ‘It’s not just Ackman buying, there is also buying at Trian and it’s for the same themes. It’s a very well run food company with multiple brands,’ said Miller. ‘It’s not economically sensitive and it’s a great simple business.’ Staying on that theme, Miller is also positive on fellow packaged foods player Pinnacle Foods (PF), up 25% thus far in 2015, primarily because it will see little impact from the dislocation currently reverberating back from the emerging markets.
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