Is AutoZone (AZO) A Smart Long-Term Buy?

Weitz Investment Management, an investment management firm, published its “Hickory Fund” third quarter 2021 investor letter – a copy of which can be downloaded here. A return of -1.31% was recorded by the fund in the third quarter of 2021, underperforming its Russell Midcap benchmark that delivered a -0.93% return. Year-to-date, the Fund has returned +12.93% compared to +15.16% for the index. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Weitz Investment Management Hickory Fund, in its Q3 2021 investor letter, mentioned AutoZone, Inc. (NYSE: AZO) and discussed its stance on the firm. AutoZone, Inc. is a Memphis, Tennessee-based retail company with a $39.1 billion market capitalization. AZO delivered a 57.32% return since the beginning of the year, while its 12-month returns are up by 67.49%. The stock closed at $1864.88 per share on November 22, 2021.

Here is what Weitz Investment Management Hickory Fund has to say about AutoZone, Inc.  in its Q3 2021 investor letter:

“A trio of auto-related businesses rounds out the top five year-to-date contributors: (which included) new parts seller AutoZone (also the Fund’s top quarterly contributor). AutoZone’s sales have exceeded expectations as the company has taken share from competitors throughout the pandemic with drivers taking on more vehicle maintenance themselves. The company’s new commercial business initiative has continued growing accounts, too. Although we anticipate above-average sales may slow to a more normal cadence, these results have translated into elevated cash flow, bolstering management’s ability to compound per-share value through share repurchases. “

Photo by Obi Onyeador on Unsplash

Based on our calculations, AutoZone, Inc. (NYSE: AZO) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. AZO was in 35 hedge fund portfolios at the end of the third quarter of 2021, compared to 34 funds in the previous quarter. AutoZone, Inc. (NYSE: AZO) delivered a 14.90% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.