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Is AutoZone (AZO) A Smart Long-Term Buy?

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Weitz Investment Management, an investment management firm, published its “Hickory Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of +8.71% was recorded by the fund in the first quarter of 2021, outperforming its Russell Midcap benchmark that delivered an +8.14% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Weitz Investment Management, in its Q1 2021 investor letter, mentioned AutoZone, Inc. (NYSE: AZO), and shared their insights on the company. AutoZone, Inc. is a Memphis, Tennessee-based auto parts and accessories retail company that currently has a $32.1 billion market capitalization. Since the beginning of the year, AZO delivered a 23.18% return, extending its 12-month gains to 30.04%. As of May 21, 2021, the stock closed at $1,460.26 per share.

Here is what Weitz Investment Management has to say about AutoZone, Inc. in its Q1 2021 investor letter:

"We initiated a new position in AutoZone, a specialty retailer of auto parts and accessories. AutoZone continues to have success with its traditional do-it-yourself customers, and it is still in the early stages of rolling out its commercial account business that reaches do-it-for-me customers. We believe both efforts have significant growth potential for years to come and are led by a management team that has demonstrated a consistent ability to grow the per-share value of their business. Investors can learn more about our investment thesis in Jon Baker’s upcoming Analyst Corner feature."

Car, Automotive, Oil
Car, Automotive, Oil

laurel-and-michael-evans-c-KDq7nxVdQ-unsplash

Our calculations show that AutoZone, Inc. (NYSE: AZO) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, AutoZone, Inc. was in 34 hedge fund portfolios, compared to 44 funds in the fourth quarter of 2020. AZO delivered a 21.11% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.