Article from home town of Auto Zone
By David Flaum The Comercial Appeal
AutoZone Inc. shares reached a 52-week high
Monday as the price continued to break away
from a four-year road to nowhere.
Shares in the Memphis-based auto parts
retailer rose $1.68 3/4 to close at $36 in
New York Stock Exchange composite trading
of 1,524,200 shares, about twice the daily
average over the past three months.
Investors are rediscovering the company,
said Craig Weichmann, analyst for Morgan
Keegan & Co. in Memphis. Their confidence
is growing in the management team that
took over the company after founder J. R.
'Pitt' Hyde III retired last year, Weichmann
said. "At first, the market said, 'We're
not really sure, he said.
But several consecutive quarters of strong
revenue and earnings growth has caused investors
to take another look at the company.
For the quarter ended Feb. 14, AutoZone
reported profits of $34.4 million, a 17
percent gain over the same period a year
earlier.
Also, management has reversed the
company's long held policy of shunning
acquisitions, agreeing to buy two companies
in two months, Weichmann said. Autozone
purchased Auto Palace, a 112-store chain
in the Northeast on Feb. 17 and agreed
on March 2 to acquire TruckPro, a truck
and trailer parts firm. TruckPro "opens up
a whole new door thats pretty exciting,"
he said. Weichmann sees the stock
price reaching $40 to $45 a share in nine
to 12 months. |
