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Here is What Hedge Funds Think About AutoZone, Inc. (AZO)

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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 867 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2021. In this article we are going to take a look at smart money sentiment towards AutoZone, Inc. (NYSE:AZO).

AutoZone, Inc. (NYSE:AZO) investors should pay attention to an increase in support from the world's most elite money managers recently. AutoZone, Inc. (NYSE:AZO) was in 35 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 55. Our calculations also showed that AZO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Paul Marshall Marshall Wace
Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks 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. Keeping this in mind we're going to take a look at the fresh hedge fund action regarding AutoZone, Inc. (NYSE:AZO).

Do Hedge Funds Think AZO Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AZO over the last 25 quarters. With the smart money's capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

Is AZO A Good Stock To Buy?
Is AZO A Good Stock To Buy?

The largest stake in AutoZone, Inc. (NYSE:AZO) was held by Arrowstreet Capital, which reported holding $254.1 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $217.2 million position. Other investors bullish on the company included AQR Capital Management, Renaissance Technologies, and D E Shaw. In terms of the portfolio weights assigned to each position 12th Street Asset Management allocated the biggest weight to AutoZone, Inc. (NYSE:AZO), around 5.12% of its 13F portfolio. BlueDrive Global Investors is also relatively very bullish on the stock, earmarking 2.71 percent of its 13F equity portfolio to AZO.

Now, specific money managers have been driving this bullishness. Renaissance Technologies, assembled the largest position in AutoZone, Inc. (NYSE:AZO). Renaissance Technologies had $161.3 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also initiated a $28.9 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace's Marshall Wace LLP, Paul Tudor Jones's Tudor Investment Corp, and David Costen Haley's HBK Investments.

Let's now take a look at hedge fund activity in other stocks similar to AutoZone, Inc. (NYSE:AZO). We will take a look at Unity Software Inc. (NYSE:U), DuPont de Nemours Inc (NYSE:DD), KKR & Co Inc. (NYSE:KKR), Otis Worldwide Corporation (NYSE:OTIS), AFLAC Incorporated (NYSE:AFL), The Hershey Company (NYSE:HSY), and NatWest Group plc (NYSE:NWG). All of these stocks' market caps match AZO's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position U,36,7901507,7 DD,51,1498457,-6 KKR,56,4652455,2 OTIS,46,2206787,1 AFL,34,223946,1 HSY,33,1274071,-5 NWG,7,8068,2 Average,37.6,2537899,0.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.6 hedge funds with bullish positions and the average amount invested in these stocks was $2538 million. That figure was $1020 million in AZO's case. KKR & Co Inc. (NYSE:KKR) is the most popular stock in this table. On the other hand NatWest Group plc (NYSE:NWG) is the least popular one with only 7 bullish hedge fund positions. AutoZone, Inc. (NYSE:AZO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AZO is 53.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on AZO as the stock returned 7% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.

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