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JimVanMeerten (65.24)

Autozone keeps you car and portfolio running

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May 27, 2010 – Comments (1) | RELATED TICKERS: AZO

Autozone ( AZO ) is the nation's leading specialty retailer of automotive parts and accessories, primarily focusing on do-it-yourself customers. Each of the company's auto parts store carries an extensive product line for cars, vans and light trucks, including new and re-manufactured automotive hard parts, maintenance items, and accessories. Many of the company's domestic auto parts stores also have a commercial sales program, which provides commercial credit and prompt delivery of parts and other products to local repair garages, dealers and service stations.

As the consumer cuts back and drives their cars longer before a trade-in auto parts companies should see an increase in sales. Autozone's marketing plan in 2 pronged. First of course directly to the do it your selfer but they are trying to also focus on sales directly to the independent mechanics that are flourishing across the country through a financed sales program.

The stock had increases in 4 of the last 5 trading sessions for an increase of 8.07% in the last week. Barchart's 13 technical indicators all signal buy for a 100% buy signal. The stock trades around 191.99 with a 50 day moving average of 179.85.

The general investing public as measured by Motley Fool CAPS members feel the stock will beat the market by a vote of 302 to 153 with the more experienced All Stars agreeing 89 to 41. Fool notes that of the Wall Street columnists Fool follows articles have been positive 15 to 0.

Brokerage firms also have high hopes and predict double digit earnings increases of 18.60% this year, 12.20% next year and expect that EPS increase to continue at the rate of 13.20% annually for the next 5 years. Sales also are expected to increase this year and next.

3 reasons to buy Autozone:
1 - Recent price increases with a 100% Barchart technical buy signal

2 -  Positive investor sentiment

3 -  Wall Street buy recommendations based on expected increases in sales and earnings

Jim Van Meerten is an investor who writes on investing on Financial Tides, Barchart and Seeking Alpha. Please leave a comment below or email JmVanMeerten@gmail.com

Disclosure: No positions in AZO at the time of publication

1 Comments – Post Your Own

#1) On May 27, 2010 at 7:30 PM, Imperial1964 (98.29) wrote:

Not my car.  I have $450 (total) invested in my car and my car is still too good for AutoZone parts.

High debt load and terrible product quality--the worst in the business.  I've been waiting for years to short this one.  And I'll keep waiting... 

Some day...

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