OReilly

O’Reilly Automotive (ORLY 1.07%) operates brick-and-mortar locations that sell various products to DIY and professional customers. This includes things like brakes, batteries, and motor oil. It’s not an exciting business, but investors should have zero complaints.

In the past five years, this retail stock is up 242% (as of Sept. 23), crushing the broader market. But is O’Reilly a smart buy right now?

Image source: Getty Images.

Consider the valuation

This company has clearly made for a terrific investment. But investors should think twice before buying shares. That’s because the valuation looks rich.

The stock trades at a price-to-earnings ratio of 36.9. This is close to the most expensive that shares have sold for in the past two decades. And the ratio has climbed 65% during the past five years, which means it has contributed to investor returns.

Paying too high of a starting valuation for a company can lead to subpar performance going forward.

O’Reilly is a great business

The stock’s expensive valuation indicates investors’ appreciation for this business. And that perspective is totally justified.

O’Reilly has an impressive history of growing its revenue and earnings. And this year is on track to be the company’s 33rd straight year of reporting a same-store sales gain. O’Reilly also registers durable demand regardless of economic conditions.

Because of the valuation, investors shouldn’t buy shares today. However, it’s best to continue keeping a close eye on this business, waiting for a pullback before making a move.

Liverpool and Barcelona want Julian Alvarez, Real Madrid remain keen on Arsenal’s William Saliba and Spurs still want to sign Savinho from Manchester City.

Former Manchester City forward Julian Alvarez, 25, is considering leaving Atletico Madrid next summer, with Liverpool and Barcelona interested in signing the Argentina international. (Fichajes – in Spanish, external)

West Ham’s concerns over Nuno Espirito Santo’s financial demands could open the door for Slaven Bilic to replace Graham Potter, who is clinging on to his job after the Hammers’ poor start to the season. (Guardian, external)

Barcelona want to do a deal with Manchester United to sign on-loan England forward Marcus Rashford, 27, for £26m – a fee short of United’s valuation, which is closer to £35m. (Star, external)

Real Madrid watched Arsenal centre-back William Saliba, 24, in action against Manchester City on Sunday and maintain their interest in signing the France international. (TBR Football, external)

Crystal Palace captain and England centre-back Marc Guehi, 25, is still eager to join Liverpool as a free agent next summer, having nearly signed for the Premier League champions on deadline day. (GiveMeSport, external)

England captain Harry Kane, 32, has a clause in his contract which means the striker could leave Bayern Munich for £56.7m next summer – but only if he announces his intention to depart the German champions before the end of the winter transfer window. (Bild – in German, subscription required, external)

Tottenham retain an interest in Manchester City winger Savinho, 21, and could revisit a potential deal for the Brazil attacker in January. (Teamtalk, external)

Meanwhile, Spurs are prepared to offer up to £35m to sign Real Sociedad’s Spain midfielder Brais Mendez, 28, in January. (Fichajes – in Spanish, external)

Chelsea are monitoring Manchester City’s Nico O’Reilly, with Leeds United, Bayer Leverkusen and Lyon also interested in the versatile 20-year-old. (Football Insider, external)

Manchester United have prioritised a “major goalkeeper signing” next summer. (Sun, external)

RB Leipzig show an interest in Rasmus Hojlund, Tottenham are looking to bring Joao Palhinha back to the Premier League, while Jadon Sancho is ready to take a pay cut in order to leave Manchester United.

RB Leipzig are among several clubs looking at Rasmus Hojlund and Manchester United could use the 22-year-old Denmark striker as part of a swap deal to sign Slovenia forward Benjamin Sesko, 22, from the Bundesliga side. (Athletic – subscription required, external)

Tottenham are in talks with Bayern Munich over a loan deal for Portugal international Joao Palhinha, 30, as they look to bring the former Fulham midfielder back to the Premier League. (Athletic – subscription required, external)

Manchester United outcast Jadon Sancho is ready to accept a 50% pay cut as the 25-year-old England winger eyes a return to Bundesliga side Borussia Dortmund. (Bild – in German, external)

Chelsea are expected to make an offer for Manchester United’s Alejandro Garnacho, 21, before the transfer window shuts and have no concerns over his character after a series of background checks on the Argentina winger. (Telegraph – subscription required, external)

England Under-20 midfielder Nico O’Reilly, 20, will sign a new contract with Manchester City after they rejected two transfer bids from German club Bayer Leverkusen. (Fabrizio Romano), external

La Liga side Girona have agreed a deal in principle to sign Manchester City‘s Brazilian defender Vitor Reis, 19, on loan. (Fabrizio Romano), external

Manchester City also want 19-year-old Claudio Echeverri to go on a season-long loan to Girona, with discussions ongoing between the Argentine winger and the Spanish club. (Fabrizio Romano, external)

Premier League duo Liverpool and Bournemouth have both opted not to match newly promoted Saudi Pro League side Neom SC’s huge offer for Nantes’ French defender Nathan Zeze, 20. (TBR Football, external)

Chelsea are interested in Club Brugge’s Ardon Jashari but the 23-year-old Switzerland midfielder prefers a move to AC Milan. (Sacha Tavolieri, external)

Everton will wait until the final weeks of the transfer window to make a loan offer for Juventus and Brazil midfielder Douglas Luiz, 27. (GiveMesport), external

Juventus have joined Atalanta, Napoli and Roma in showing an interest in Brighton‘s 24-year-old Denmark international midfielder Matt O’Riley. (Sky Sports Italia) , external

Inter Milan rejected the chance to sign Chelsea and France striker Christopher Nkunku, 27, as they are focus on a move for Atalanta’s 27-year-old Nigeria forward Ademola Lookman. (Gazzetta dello Sport – in Italian), external