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VIDEOTicker Shock: Four Reasons to Take AutoZone for a Spin
Thursday's top stories and stocks with potential to move.
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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 this fine Thursday morning:
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.
Pacific Sunwear (PSUN): Looks like the baton is being passed. According to a release last night after the close:
“Pacific Sunwear of California, Inc. today announced that Gary H. Schoenfeld, who previously served as President and Chief Executive Officer of Vans, Inc. and Co-CEO and President of Global Brands Group, will become President and Chief Executive Officer of the Company, effective June 29, 2009.”
My thoughts:
1. That passing of the baton may be a good thing. Schoenfield seems like he has a good background, and I’m hoping the Street will welcome the change, too.
2. One of Schoenfield and crew’s first orders of business should be to do everything in their power to get the stock north of $5. That could hypothetically put the shares on more radar screens. 3. Given the red ink that’s expected this year and next, I’m lacking that warm, fuzzy feeling. But who knows -- maybe the new top dog will give us all a reason to test the waters.
4. I don’t want to forget about the insider buying that took place at the end of 2008 and in the first quarter of 2009.
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