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AutoZone (AZO) Continues to Perform

Nov 17 2010

AutoZone (AZO) Continues to Perform

The Memphis Tennessee operator of specialty retail stores in the automotive industry continues to see earnings expectation increases and new stock price highs with it’s current quarter to be announced December 7th. Currently priced at $11.38 billion, the company does not offer a dividend and has provided nice appreciation over the past year.

The stock of AutoZone recently hit a new 52 week high of $249.53 on November 10th and looks within range to top that price sometime in the near future. Analysts continue to improve their estimates for the current quarter and are now expecting $3.38 a share. The current year estimates have also been increased over the past three months, from $16.54 a share to $17.39. Revenue is also expected to increase 7% compared to the same quarter last year.

With earnings increasing at roughly 20% a quarter and the current price to earnings (P/E) ratio at 14.46, the PEG ratio is 0.94. A decent number for such a good growth stock.

In a recent article on Investopedia, AutoZone is compared to Advanced Auto Parts which just reported a great quarter. AutoZone is considered the better investment because of its aggressive share buyback plan that has allowed earnings to rise sharply.

Options for AutoZone are lightly traded so the best bet for a trade is to own the stock itself. The chart trend of the stock price remains positive although slightly overbought from a technical perspective. Even with the overall market indexes signaling a hold preference at this time, you could purchase shares of AutoZone in anticipation of appreciation in the stock leading up to the earnings in a couple of weeks.


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