Automotive Pair Trade: Sell Tesla, Buy AutoZone

Jun. 20, 2022 1:01 PM ETAutoZone, Inc. (AZO), TSLA15 Comments
Bradley Guichard profile picture
Bradley Guichard
6.32K Followers

Summary

  • Perhaps no industry has been upended since the pandemic like the automotive industry.
  • From chip shortages to record gas prices, there's a lot to digest in the market.
  • Below, I make a case for AutoZone stock outperforming Tesla stock during this period of high inflation and potential recession.
AutoZone Exterior Night View

M. Suhail/iStock Editorial via Getty Images

Introduction:

The automotive industry is one of the most sensitive industries to economic upheaval. We saw this in 2009 with multiple reorganizations after the housing market's collapse, and we're seeing different effects today. Automakers' reaction to the pandemic, general inflation, sky-high gas prices, and rising interest rates

This article was written by

Bradley Guichard profile picture
6.32K Followers
My philosophy is to invest in equities with focus on companies which produce generous amounts of positive cash-flow and have growth opportunities to benefit medium to long-term investors. I have a diversified portfolio including growth and value equities, REITs, dividend stocks, and like to use options for income when the opportunity arises. I have over 15 years of experience in the market. I am a practicing CPA, however I have learned about investing more from avid reading, market watching, experience, and of course making mistakes over the years. Also, am an admitted Excel junkie. I try to remember Mark Twain's wisdom: "It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so"Thank you very much for reading and please feel free to leave me a message in the comments or send a private message. All the best!

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in AZO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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