Looking at five, high flying stocks, Amazon (AMZN), Google (GOOGL), Booking.com (BKNG), (NVR) and Autozone (AZO) that are above $1,000 a piece, investors may wonder if any of them are worth the investment with such a high price.
It’s especially tricky right now, because the market is again, at new, all-time highs – which is typically the worst time to invest. I always like to wait for a bit of a pullback before entering the market, but that is what makes Autozone so interesting. While the big tech stocks, Google and Amazon, are leading the way higher, Autozone has pulled back into oversold support. This, in addition to the overall macro story, make it a good candidate for a buy. Out of this bunch, it’s definitely my favorite.
If you look at AZO over the course of the past 20 years, it has shown consistent earnings and growth, even during times of an economic downturn in 2007 and 2008. This will likely make it a solid stock candidate even if and when the economy stagnates again, which eventually it will. During strong, economic times, it makes sense to have high flying tech names in my portfolio, but I also want to make sure to have some stocks that will likely remain strong in different economic conditions. This is what makes a balanced portfolio.
Why do I like AZO in this instance? It is because in times of economic downturn, consumers are less likely to buy a new vehicle, but instead repair a vehicle they currently own, and buy parts from a strong company like AZO. It has thrived during both strong and weak times, and is a leader in it’s industry group. I expect it to continue along this path it has demonstrated over the course of the last twenty years.
While I like it for an oversold buy in the stock market, and I am looking at it for a possible bounce into earnings. I typically trade this either with bullish put credit spreads, or a call butterfly.
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