(GuruFocus, June 24, 2009) Investment Guru Edward Lampert started to unload shares in car dealership company Autozone (AZO, Financial). According to GuruFocus data, Lampert sold 56,851 shares of AZO stock on 06/23/2009 at the average price of $155.06, and he sold 396,877 more shares of AZO stock on 06/22/2009 at the average price of $156.41. After the sales, Edward Lampert still holds 23.15 million shares of AZO stocks, or over 42% of the company.
The sale in two days in a row is the first time that Lampert sold the stock. Lampert was seen first reported to have acquired 22 million shares in 4Q06 and he increased to 22.88 million shares in 2Q08 and 23.37 million shares in 4Q08. The AZO stock price, in the meantime, has climbed from $115 to over $160. It has been a successful trade for Lampert.
Autozone is the nation's leading specialty retailer of automotive parts and accessories primarily focusing on do-it-yourself customers. AutoZone Inc. has a market cap of $8.14 billion; its shares were traded at around $148.8 with a P/E ratio of 13.2 and P/S ratio of 1.3. AutoZone Inc. had an annual average earning growth of 23.1% over the past 10 years. GuruFocus rated AutoZone Inc. the business predictability rank of 3-star.
The ongoing economic recession has actually helped the companies business. As the new cars sold in the US dropped dramatically, people rush to stores like Autozone for parts to repair their old cars. On May 27, 2009 , the company reported net sales of $1.7 billion for its third quarter (12 weeks) ended May 9, 2009, an increase of 9.3% from fiscal third quarter 2008 (12 weeks). Net income for the quarter increased $15.1 million, or 9.5%, over the same period last year to $173.7 million, while diluted earnings per share increased 25.9% to$3.13 per share from $2.49 per share in the year-ago quarter.
Reflected on the company’s stock, GuruFocus has first reported AZO stock prices reaching its 52-week highs since early March, when the rest of the market tumbled to 12-year low. The company have made to the 52-week high list quite frequent since then as the company’s stock marched higher.
Company insiders, however, seem not to be sharing the same enthusiasm with the outsider investors. Recently Executive VP , Harry L Goldsmith sold 10,000 shares of AZO stock on 06/04/2009 at the average price of $157.33; Senior Vice President Larry M Roesel sold 3,875 shares of AZO stock on 03/12/2009 at the average price of $161.05. There is no insider buying the stock.
Company executives could be selling stock for a number of reasons, not necessarily a vote of lack of confidence in the company’s good fortune. Even Lampert's sale cannot be interpreted as a bearish sign of the company's future.
Perhaps one of the most noteworthy facts about Autozone is the speed at which it is buying its own stocks. On June 17, 2009 , the company 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. Company number of stock outstanding has shrunk from 149 million shares in 1999 to less than 55.5 million shares as of May 9, 2009. That is a 9% shrinkage per year. At this speed there will be one day that Edward Lampert will be the sole owner of the company if he choose not to sell his shares.
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The sale in two days in a row is the first time that Lampert sold the stock. Lampert was seen first reported to have acquired 22 million shares in 4Q06 and he increased to 22.88 million shares in 2Q08 and 23.37 million shares in 4Q08. The AZO stock price, in the meantime, has climbed from $115 to over $160. It has been a successful trade for Lampert.
Autozone is the nation's leading specialty retailer of automotive parts and accessories primarily focusing on do-it-yourself customers. AutoZone Inc. has a market cap of $8.14 billion; its shares were traded at around $148.8 with a P/E ratio of 13.2 and P/S ratio of 1.3. AutoZone Inc. had an annual average earning growth of 23.1% over the past 10 years. GuruFocus rated AutoZone Inc. the business predictability rank of 3-star.
The ongoing economic recession has actually helped the companies business. As the new cars sold in the US dropped dramatically, people rush to stores like Autozone for parts to repair their old cars. On May 27, 2009 , the company reported net sales of $1.7 billion for its third quarter (12 weeks) ended May 9, 2009, an increase of 9.3% from fiscal third quarter 2008 (12 weeks). Net income for the quarter increased $15.1 million, or 9.5%, over the same period last year to $173.7 million, while diluted earnings per share increased 25.9% to$3.13 per share from $2.49 per share in the year-ago quarter.
Reflected on the company’s stock, GuruFocus has first reported AZO stock prices reaching its 52-week highs since early March, when the rest of the market tumbled to 12-year low. The company have made to the 52-week high list quite frequent since then as the company’s stock marched higher.
Company insiders, however, seem not to be sharing the same enthusiasm with the outsider investors. Recently Executive VP , Harry L Goldsmith sold 10,000 shares of AZO stock on 06/04/2009 at the average price of $157.33; Senior Vice President Larry M Roesel sold 3,875 shares of AZO stock on 03/12/2009 at the average price of $161.05. There is no insider buying the stock.
Company executives could be selling stock for a number of reasons, not necessarily a vote of lack of confidence in the company’s good fortune. Even Lampert's sale cannot be interpreted as a bearish sign of the company's future.
Perhaps one of the most noteworthy facts about Autozone is the speed at which it is buying its own stocks. On June 17, 2009 , the company 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. Company number of stock outstanding has shrunk from 149 million shares in 1999 to less than 55.5 million shares as of May 9, 2009. That is a 9% shrinkage per year. At this speed there will be one day that Edward Lampert will be the sole owner of the company if he choose not to sell his shares.
GuruFocus provides Real Time Guru Picks and Insider Buys/Sells information for Premium Member. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
