Pep Boys: Price Skid Presents Long Opportunity

Pep Boys (PBY) shares got absolutely pummeled in an abbreviated week, getting chopped 18% to a new 52-week low of $7.39 before making a feeble comeback to close at $7.56 in a shortened session. To say that this sell-off was "perplexing" is an understatement, as the Dow lost a mere 1.3% for the week, making PBY's "beating" 14 times worst than the DJIA. PBY's beta is nearly flat at 1.06, signifying it should be only 6% more volatile than the overall market. Its relative strength was just horrendous.

It is certainly a mystery why the shares lost so much value this past week, especially when PBY issued no news or SEC filings. Its volume was also nothing out of the ordinary, tallying about 10% higher than normal. The shares, in the past twenty years, have only touched prices this low one time, just after 9/11.