Prepared by Chris, CEO of Quad 7 Capital, and Team Leader at BAD BEAT Investing
AutoZone (NYSE:AZO) is a name that we cover regularly. In March we highlighted it as a tremendous buy under $800, and the stock has rallied hard with the market and on the back of its own performance. In this column, we continue our regular coverage of the name following its just reported earnings, and believe that at $1150 it is time to take some profit. We think that it is prudent money management here to back out the initial investment plus a little extra to go buy something nice for yourself. The rest you can let run with the House's money. With the COVID-19 market crisis, AutoZone's operations have been impacted, and of course as we saw in March, the stock was not spared. This was an opportunity and it remains our opinion that this company will thrive moving forward, but the stock is also a little ahead of itself. The present fiscal Q4 is definitely going to experience pain as economies are still reopening and there are recession impacts from people out of work and many businesses closed. However, we continue to believe that when the peak of transmission has passed in North America in terms of an incidence rate, while the lasting economic consequences will linger a bit longer. There are concerns that COVID-19 could resurface as summer passes and fall approaches. That remains to be seen, but independent of any of that, the fact is that we have a stock up nearly 50%. If we consider that there will be some lasting impacts on middle and lower income Americans, then it is likely that many will try and extend the life of their cars. Under these assumptions, AutoZone, as a company should reap rewards, so we think it is fine to keep a position on with the House's money. By doing so, you
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