Insider Buying

Insider Buying Report: AutoZone Inc (AZO:US)

AutoZone Inc
(AZO:US)
12 months:
+42.65%
Activity:
Bullish
Pattern:
Large purchase from board member
News:
Q3 results
AutoZone Inc
(AZO:US)
12 months:
+42.65%
Activity:
Bullish
Pattern:
Large purchase from board member
News:
Q3 results

There are two main reasons insiders invest in their own companies. They either believe that business is about to get better, or that the company is undervalued. Whatever the reason, insider buying tells us that those within the company expect the company’s share price to rise.

In this report, we are going to highlight some interesting inside buying at AutoZone Inc (AZO:US). AutoZone is an American retailer and distributor of automotive replacement parts and accessories. Founded in 1979, it operates in 50 US states, as well as in Puerto Rico, Mexico, and Brazil. The company is listed on the New York Stock Exchange and has a market capitalization of $41.5 billion at present.

AutoZone Inc: Insider Buying

Our data shows that on May 26, board member Brian Hannasch picked up 133 AutoZone shares at a price of $1,901.95 per share. This trade cost the insider $252,959 and increased his holding to 512 shares.

Insider Confidence

This insider trading activity is worth highlighting for several reasons. Firstly, this trade has increased the size of Mr. Hannasch’s holding by 35%. The fact that the insider has upped his stake by such a large percentage suggests he’s confident the stock can climb higher.

Secondly, Mr. Hannasch is not the only insider at AutoZone that has bought stock in recent months. Back in March, Autozone’s Chief Information Officer Michelle Borninkhof purchased 259 shares at a price of $1,944.66 per share. This trade cost her approximately $503,700.

Good Q3 Results

AutoZone recently posted a solid set of Q3 results that were well ahead of the market’s expectations.

For the 12 weeks ended 7 May, revenue came in at $3.87 billion versus the consensus forecast of $3.71 billion. This represented growth of 5.9% year on year with same store sales growth of 2.6%. Meanwhile, adjusted earnings per share amounted to $29.03 per share – comfortably above the consensus forecast of $26.05 per share. This was up from $26.48 in the prior-year quarter.

As a result of this strong performance, the company repurchased 449,000 shares of its common stock during the quarter for $900 million at an average price of $2,006 per share.

“We are very proud to report solid same store sales growth on top of last year’s remarkable 28.9%. Both our retail and commercial sales performance exceeded our expectations this quarter. While our commercial sales growth accelerated to 26.0%, our retail sales also remained healthy considering the tough comparison from a year ago. We continue to believe the initiatives we have in place position us well for our upcoming fourth quarter,” commented Chairman, President, and CEO Bill Rhodes.

In light of this strong performance, we see the insider buying here as a bullish indicator.

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