Autozone Inc. (AZO)

Sells at only 19x PE and continues to buy back shares. He expects a comeback, but so far this year he's been wrong. Don't sell.

It mystifies him. They buy back a lot of shares. He's been recommending this for 10 years, but shares are down 2% the last 6 months. You can buy it at current levels.

Is -8% the last 6 months, but it is a consistent company. He expects a better next quarter. AZO always pivots.

Buys back a lot of shares, reducing shares by 45% since end-2015. Is up 3,582% over 20 years. Has pulled back 22% from recent highs, making this an opportunity.

They report Tuesday. He's long recommended this. They are one of the most aggressive buyers of their own shares. Also, the age of cars is getting really old in the U.S. while new cars are expensive. So, car owners can maintain their cars by buying parts from AZO.

Used cars should do well after all these tariffs, which will make new cars more expensive and used ones (and repairs on existing cars) more attractive. They last reported strong same-store sales growth and an earnings miss. They have hundreds of stores in Mexico and Brazil, so currency fluctuations hurt them. The core American business is solid, though. The CEO is optimistic about this year. Is still up 15% this year. Yes, Trump has slapped 25% tariffs on foreign car parts, but Americans will pay up for those because they must use their cars--a necessary expense. Buys back a lot of shares.

They report Tuesday. Will include results in China; any company reporting about China should be regarded skeptically. It is buying back a ton of shares, though. Can it sidestep tariff worries?

He likes it for their commercial business and Latin American operations. People are holding onto their cars longer. He'd buy here.

It's a trade-down necessity thesis in cars. Buying a new car is expensive, so people will stick with their cars longer.

They're growing their commercial business in Mexico, people are holding onto their cars longer and they manage their margin expansion well. Still likes it.

We do not see any significant news driving AZO's price lower other than institutional transactions. Barclays did slightly lower its target price recently. We continue to like AZO and at current levels it remains an attractive buy. AZO is also known to aggressively buy back shares. 
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International sales are growing nicely, such as Brazil where they just started doing business. The main thing is that equipment costs have fallen, so gross margins have expanded. Also, the average age of a car is 12.5 years which benefits AZO.

Auto supplies are very hit-or-mess, which is why he likes AZO, because they buy back a lot of shares, which gives him the assurance he needs.

Likes it; they keep buying back shares.

It sat out the rally this year, but continues to execute. Has owned this a long time.