Categories: Alpha Algorithm HotlinesStock Market News

Buying a Seven-Strategy Alpha Algorithm All-Star

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.

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.

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.

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.