5 'Magic Formula' Stocks for 2013
Even though the firm is best known for its retail stores, AutoZone also runs a lucrative commercial business that provides parts to repair shops and service stations. While the margins aren't as deep for the commercial part supply business, the volumes are, and they enable AZO to take advantage of repair trends that extend beyond the do-it-yourselfers who stroll into one of the firm's stores.
Mexico is a big growth market for AZO. Like the U.S., Mexico has a car culture that's reliant on personal vehicles for transportation. And with an aging fleet south of the border, AutoZone's stores should continue to generate impressive returns on invested capital. A manageable debt load and double-digit net profit margins should leave room for AZO to keep up its growth trajectory abroad...
To see the magic formula rankings for these five stocks, check out the Magic Formula Q4 2012 portfolio on Stockpickr.
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