When credit starts flowing again next year and people move out of their used cars that need parts and back into homes with new cars, this stock is finished. The big question is WHEN ?
Totally agree. A sector can, and does sometimes, carry on a long while after it is obvious to anyone with a brain that the sector is toast. (e.g., homebilders comes to mind.)
This stock is a dangerous one to short. They could easily run. Its in strong hands. They are like the homedepot of the Auto biz with no Lowes to compete. when the economy goes bad the Do it yourselfers go there. With dealerships going under then you have only aftermarket parts available. Where do you get these AUtoZONE. Its a tricky trade. It could get a stock split soon or it could increase as more institutions get into the stock. Never short a stock because its too high.... AZO target price 250...
AZO dropped 10 points today while the market rallied. Tomorrow should be an interesting day for those long AZO. Might just see them fill that early March gap.
You should learn how to do research. 1) AZO does have competitors, a simple use of Yahoo Finance will lead you to:http://finance.yahoo.com/q/co?s=AZO 2) Profit margins from auto parts retailers do not come basic parts but from more luxury items, like rims & trinkets. Profit margins will contract. 3) Their balance sheet sucks and they are sitting on a lot of inventory that is obviously not moving. 4) The ONLY thing that they have been doing which is stock price positive is buy back a lot of shares on a consistent basis 5) The stock is manipulated via RBS where one of their former execs went.