Buying a Seven-Strategy Alpha Algorithm All-Star

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

It is rare that any stock attracts the attention of seven different Alpha Algorithm strategies. But this week’s Alpha Algorithm recommendation fits just that bill.

Memphis-based AutoZone, Inc. (AZO) sells and distributes automotive replacement parts and accessories. AutoZone’s earnings per share (EPS) have grown by double-digit percentages for 38 consecutive quarters. EPS has been driven by rising revenues and higher gross margins from both the retail and commercial businesses, together with increasing store count and regular share buybacks.

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AutoZone vs. the S&P 500 over 1 year

 

Seven Top Investment Strategies Betting on
 AutoZone, Inc. (AZO).

1.  Insider Buying

AZO is among the U.S. stocks that corporate officers, directors and shareholders who own more than 5% of each company’s shares are accumulating.

2.  Insider and Analyst Sentiment

One of 100 top stocks out of 5,000 U.S stocks of which a corporate insider (a director or senior officer of a company, or any person or entity that owns more than 10% of the company’s stock) is buying the shares and Wall Street analysts recently have increased earnings estimates.

3.  Share Buybacks

The company has reduced its number of shares outstanding by at least 5% in the previous year through share re-purchases.

4.  Float Shrink

The company is shrinking its float while growing free cash flow and not increasing its leverage.

5.  Momentum Model

The stock is among the top approximately 100 U.S.-listed companies to demonstrate powerful relative strength characteristics relative to the 3,000 largest U.S.-listed companies.

6.  Value Line Model

The stock is among the 100 stocks, from a universe of 1,700, to which Value Line gives a #1 ranking in its Timeliness Ranking System.

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7.  Large Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

Recommendation

Buy AutoZone, Inc. (AZO) at market today. Place your initial stop at $690.

Options: With the stock technically overbought on the short term, I am holding off on recommending options this week.

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