Unusual Social Activity Around AutoZone (AZO) Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified AutoZone ( AZO) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified AutoZone as such a stock due to the following factors:

  • AZO has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 2.26 mentions/day.
  • AZO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $189.1 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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More details on AZO:

AutoZone, Inc. retails and distributes automotive replacement parts and accessories in the United States. AZO has a PE ratio of 21. Currently there are 4 analysts that rate AutoZone a buy, no analysts rate it a sell, and 14 rate it a hold.

The average volume for AutoZone has been 285,000 shares per day over the past 30 days. AutoZone has a market cap of $21.9 billion and is part of the services sector and retail industry. The stock has a beta of 0.74 and a short float of 7.8% with 7.97 days to cover. Shares are up 11.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AutoZone as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 29.36% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AZO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • AUTOZONE INC has improved earnings per share by 15.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AUTOZONE INC increased its bottom line by earning $31.66 versus $27.88 in the prior year. This year, the market expects an improvement in earnings ($35.84 versus $31.66).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 9.8% when compared to the same quarter one year prior, going from $192.83 million to $211.72 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 7.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for AUTOZONE INC is rather high; currently it is at 55.04%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.87% is above that of the industry average.

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