My computer froze up twice as I was trying to log on and write this. I rebooted both times, but it took almost a half hour for it to finally come to life. And to top things off, in between reboots, I spilled a cup of cranberry juice (who does that, right?) that hit the corner of my keyboard. Thankfully, it didn’t short anything out. Looks like it’s gonna be one of those days.
Asian stocks ended lower. Then Hang Seng was down 1.7% and the Nikkei finished down 1.39%. European socks were showing me some red earlier this morning as well. And here in the US, we're currently trading higher.
Here's what I’m focused on:
AutoZone (AZO):
Some good news was out last night after the bell. According to a release :
"AutoZone, Inc. today announced its Board of Directors authorized the repurchase of an additional $500 million of the Company's common stock in connection with its ongoing share repurchase program. Including the above amount, the share repurchase authorization now totals $7.9 billion since 1998."
As many of you know by now, I tend to do a double take (in a good way) when a company authorizes and does a stock buyback. This is because it's not an action a board would approve unless it was confident in the company’s financial future and thought it would have the coin to make the repurchases. Logically speaking, that's also a lot of dinero that could have been spent elsewhere.
My thoughts on this company:
1. It's trading near the upper end of its 52-week range. And if it's able to break through and make a new high, even more eyes may be on it.
2. That $155 or so price tag sure sounds lofty, but the company trades at a very reasonable 13.3 times the current-year estimate (which is $11.69).
3. With Americans still a tad stingy with their flash, I’m betting a good number of handy people will continue to go it alone when it comes to tinkering with their rides. That should have the company spending a lot of time ringing the register (sounds like a Toddo phrase).
4. Data shows that the company has beaten estimates in the last 3 quarters. That’s certainly something that raises my eyebrows, too.
In case you can't tell, I’m a bull on the stock and I think its going to ratchet (get it?) higher from here.
2. I know I’m a picky guy, but I'd like to see some more estimates in the black, looking forward. Right now, all I see is a river of bright red ink.
3. Show me the catalyst!
4. I know I’m more than a few light years ahead of myself here, but if the stock stays in the crapper, tax-loss selling could be tough for these guys and existing shareholders.
I’m not bellying up now, nor is it probable I will in the near future. Because this is a big name, however, I’ll keep my eyes open. Stay tuned!
Have a great day!
Author: Glenn Curtis
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