Transportation and Automotive Sector Ideas

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Autozone - >>> These 3 High-Priced Stocks Are Actually Cheap



http://www.fool.com/investing/2017/01/09/these-3-high-priced-stocks-are-actually-cheap.aspx?source=yahoo-2-news&utm_campaign=article&utm_medium=feed&utm_source=yahoo-2-news



Driving big share-price gains

The auto industry has been on fire in recent years, with record sales for U.S. automakers in 2015 and with 2016 having held up quite well rather than giving way to typical cyclical pressure. AutoZone has also found itself a big beneficiary of favorable industry conditions, and the stock has climbed to almost $800 per share. That's an impressive run for a stock that traded in single digits back in the early 1990s.

AutoZone's secular success has come from the fact that people are keeping their cars longer, and although increased reliability is one factor in that decision, the willingness to do ongoing repairs and maintenance also plays a key role. AutoZone has tapped into that market well, with a combination of new store expansion and strong same-store sales growth that has driven profits higher. Moreover, AutoZone is committed to buying back stock, which also boosts earnings per share. As a result, AutoZone already has a trailing earnings multiple of just 19, and expected double-digit growth in the years to come will reduce that figure even further.

Don't let high share prices scare you into thinking that a stock is fundamentally expensive. As the history of these three high-flyers shows, sometimes you'll find the best bargains among companies that have already seen big gains in the price of their stock.

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