We recently published a list of 10 Stocks Market Experts are Talking About These Days. In this article, we are going to take a look at where Autozone, Inc. (NYSE:AZO) stands against other stocks that market experts are talking about these days.
Piper Sandler’s Chief Market Technician Craig Johnson said in a latest program on CNBC that despite the recent market volatility and “negative” headlines, he sees buying opportunities for long-term investors.
“The headlines out here are extremely negative all over the place and the sentiment toward this market is absolutely awful. Typically, you find these readings near sort of bear market lows, which is what you typically see. And if you also start to look at the VIX, it is elevated out here at this point in time. Now, technically we have broken some uptrends, we’ve closed below 50 and 200-day moving averages, but we’re getting to some pretty washed-out levels. I started looking at new highs, new lows, breadth indicators, and all these pieces. And we’re starting to get to levels where you look back and say, “Is this 1989? Is this a period of time that’s like the great financial crisis or the ’87 market crash?” And I think the answer to that is flat out no. So, we’re setting ourselves up for, I think, a potentially pretty good buying opportunity. All this negativity, and again, as Warren Buffett has said, you’ve got to be greedy when people are fearful. When people are greedy, and definitely a lot of fear out here, that seems to me to be a little bit misplaced on the charts.”
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For this article, we picked 10 stocks notable Wall Street analysts were discussing over the past few days. With each company we have mentioned the latest hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician in a mechanic’s uniform replacing an A/C compressor, signifying the company’s automotive replacement parts business.
Autozone, Inc. (NYSE:AZO)
Number of Hedge Funds Investors: 47
Joshua Brown of Ritholtz Wealth Management explained in a latest program on CNBC his bullish thesis for Autozone, Inc. (NYSE:AZO).
“This is not just recently one of the best stocks in the market — this is like a perennial All-Star. I wanted to highlight three names that are finding support at important trend lines because in this kind of market, if you want to buy strength, you should be buying strength intelligently. AZO is up 10% year to date. It’s only 5% below its 52-week high. Importantly, it is finding strong support at its 50-day moving average, which you can see in blue right there. It’s got another level at the 200, which is not far below. This is an extremely profitable company with net margins of 14% and a 23 multiple, which is not terribly expensive. It’s expecting 3% earnings growth this year. I think it’ll find that support.”
Brown Advisors Global Leaders Strategy stated the following regarding AutoZone, Inc. (NYSE:AZO) in its Q4 2024 investor letter:
“AutoZone, Inc. (NYSE:AZO) is the leading replacement automotive parts retailer and distributor in the US, servicing both the Do-it-Yourself (DIY) and Do-it-for-Me (DIFM) segments of the used car market, a market that is structurally growing as the fleet expands, with a high degree of visibility into future demand of the 6+ year used car cohort, which is AutoZone’s core target market. AutoZone is expanding into the faster growing DIFM market, as well as into Brazil and Mexico. The company’s superior customer outcome is immediate parts availability and the meaningful de-risking of the balance sheets of smaller garages which do not need to hold inventory themselves. It offers a differentiated service for customers based on local availability of parts (“in stock, in market”), quick turnaround speed and advice (including free specialty tool loans so DIY customers can complete necessary maintenance at lower cost but generating enduring loyalty). All this has historically proven difficult to replicate in an e-commerce setting. While there are a small number of large companies operating in this growing market, further consolidation of smaller competitors is expected as leading retailers’ scale (depth and breadth of inventory) and network effects (proximity to customers in immediate need of repair) constitute strong moats. One of the impressive characteristics of the company’s capital allocation is that it has delivered exceptional capital discipline and deployed its cash flow into share buybacks which has reduced the company’s share count by about 85% since 2000.”
Overall, AZO ranks 8th on our list of stocks that market experts are talking about these days. While we acknowledge the potential of AZO, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AZO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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