AZO was recommended by Dow Theory Forecasts at $277.81 in Investment Digest issue 693, dated April 20, 20. AZO closed yesterday at $388.87.
“AutoZone, Inc. (AZO) is being dropped from the Buy and Long-Term Buy lists. The stock has rallied 18% this year, nearly triple the gain of the S&P 1500 Index. That surge leaves the shares looking expensive at 18 times trailing earnings, an 18% premium to their three-year average and 10% above the median for S&P 1500 automotive-retail stocks. The stock’s Value score has slumped to 36, pulling the Overall score down to 83 from 94 at the start of the year.
“Stock buybacks have carved 20% from the share count in the past two years, aiding per-share profit growth. But long-term debt now stands at 161% of total capital, up from 118% two years ago, which could eventually limit AutoZone’s ability to repurchase its shares. Initiated as a Buy and Long-Term Buy in April 2011 at $276 per share, AutoZone should be sold. The stock is now rated B (average).”
- Richard J. Moroney, CFA, Dow Theory Forecasts, May 16, 2012