Uncertainty remains the operative phrase regarding the U.S. economy and the stock market. But one sector should fair reasonably well in just about any economic climate: automotive undercar repair and tire service, that's why Monro Muffler Brake is worthy of investor consideration.
Look for MNRO's auto repair operations (engine maintenance, brakes, tires) to continue to shine as car owners maintain their existing used cars to their budget's ability, as many will be unable to buy a new car. Monro will also benefit from the increase in used cars sales -- they'll need more maintenance, too. The First Call FY2009/FY2010 EPS estimates for MNRO are $1.45 to $1.74.
Stock Analysis: Monro is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in MNRO now; then buy another 25% in three months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your MNRO position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $17.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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