AutoZone, Inc. (NYSE:AZO)’s stock opened lower, but has rebounded and is currently trading around 1% higher on the back of the company reporting its financial results for the fiscal third quarter. The Memphis based automotive parts company posted EPS of $10.77, below the estimates of $10.92. Revenue in the quarter came in at $2.6 billion, falling short of the estimated $2.65 billion. Same store sales increased 2% in the quarter. In the earnings call, AutoZone’s CEO Bill Rhodes said that the sales in the quarter were hit due to the weather in Midwestern, Middle Atlantic, and Northeastern states. Mr. Rhodes said that the company plans to open four additional mega hubs by the end of the current fiscal year. Seeing how the stock is moving on the back of its earnings, let’s take a look at how hedge funds and other big investors positioned themselves in AutoZone, since they usually focus on the long run.
AutoZone, Inc. (NYSE:AZO) investors should pay attention to an increase in activity from the world’s largest hedge funds of late. AZO was in 46 hedge funds’ portfolios at the end of March, compared to 41 hedge funds in our database with AZO holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Anadarko Petroleum Corporation (NYSE:APC), Edison International (NYSE:EIX), and State Street Corporation (NYSE:STT) to gather more data points.
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Today there are tons of indicators stock market investors have at their disposal to grade publicly traded companies. A couple of the most useful indicators are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the market by a superb amount (see the details here).
On the next page, we are going to take a closer look at the hedge fund sentiment that surrounds AutoZone.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, billionaire Steve Cohen’s Point72 Asset Management has the biggest position in AutoZone, Inc. (NYSE:AZO), worth close to $149.7 million, comprising 1.1% of its total 13F portfolio. The second largest stake is held by Richard Chilton of Chilton Investment Company, with a $116 million position; 4.3% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions include D. E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Consequently, some big names have been driving this bullishness. Alyeska Investment Group, managed by Anand Parekh, initiated the largest position in AutoZone, Inc. (NYSE:AZO). Alyeska Investment Group had $51.6 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $29.9 million position during the quarter. The following funds were also among the new AZO investors: Matthew Tewksbury’s Stevens Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Leon Cooperman’s Omega Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AutoZone, Inc. (NYSE:AZO) but similarly valued. We will take a look at Anadarko Petroleum Corporation (NYSE:APC), Edison International (NYSE:EIX), State Street Corporation (NYSE:STT), and Deutsche Bank AG (USA) (NYSE:DB). This group of stocks’ market caps are similar to AZO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| APC | 59 | 1843220 | -2 |
| EIX | 25 | 617921 | 7 |
| STT | 24 | 531164 | -3 |
| DB | 10 | 23977 | 1 |
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $754 million. That figure was $1080 million in AZO’s case. Anadarko Petroleum Corporation (NYSE:APC) is the most popular stock in this table. On the other hand Deutsche Bank AG (USA) (NYSE:DB) is the least popular one with only 10 bullish hedge fund positions. AutoZone, Inc. (NYSE:AZO) is not the most popular stock in this group, but hedge fund interest is still above average.
Disclosure: None
