The AZO chart looks like it has been hitting a series of lower highs over the past few months. I've covered some of my short position because it was too large for my comfort and because I need to leave at 3 and won't be around for the last regular market hour before earnings. I hope that when I want to add back to my short position, AZO will still be shortable. If not, I'll just ride down the short shares I'm holding onto.
There are fewer shares so that could pump up earnings per share, but I think all that has already been priced into the stock price. AZO will go down IMHO. The question is whether it goes down gradually or whether it gaps down and whether it starts on its way down big time before or after September 30. Any comments by shorts on whether my reasoning makes sense?
So you are saying you think EPS will be much higher, but the stock will go down... The stock went from $170 to $145 in the past few months. I think expectations are low now. The stock trades at 13X EPS and posted 26% growth last q. If they are in line, I think the stock is to cheap.
Earning estimates are for $4.55 / share. They have never hit over $4 in the history of the company. Plus the cash for clunkers program is going to hit them hard .. if not for this quarter then for future outlook. Other auto part companies have missed earnings, why should we think AZO will be any different .... plus they have soo much debt. <p> And Lampert and others have been selling a lot in the past 2-3 months. If insiders are getting out at these prices, I think it's reasonable to assume, we are going lower, much lower.
I don't think the EPS will be higher. I wrote that IF it is (due to financial manipulation), it is already more than in the current stock price. It is hard to know before they report earnings what "rabbit" they'll pull out of a hat just once more. The true story screams at us in the stock dumping by insiders, especially the "brain" behind the "business."