Ranjit Thomas

AutoZone: The End of a Bear Market Bulwark?

Maybe your analysis can be improved by looking at AZO's PE and FCF multiple? I believe these are still pretty reasonable, especially compared to a competitor like ORLY.

O'Reilly's Earnings Accelerate, but Stock Price Stalled

Look at the cash flow statement. ORLY burned through $60Mn this quarter, and free cash flow is negative $160Mn in the last twelve months. These are the kinds of numbers one usually sees with companies that have borderline accounting fraud. So disregard the reported "profits" and follow the cash.

O'Reilly Automotive Benefits from the Slump

ORLY hasn't generated any cash in the last 3 years, with free cash flow being more than negative $40Mn in 2008. It spends a huge amount on capex, and doesn't seem to flow it through into depreciation, thus inflating earnings. Aggressive accounting at best, borderline fraud at worst. Why would anyone want to buy a company at 18x low quality earnings, when half the market is trading at a single digit multiple?

O'Reilly Automotive Continues to Shine

ORLY is trading at 20x EPS and has a consistent history of not generating any cash. Free cash flow for the last 12 months is negative, making the reported earnings suspect. This is one of the best shorts in this market.