A Sign of the Times

Will 2009 go down in history as the year we started fixing our own cars?

A look at AutoZone Inc. (NYSE: AZO), the do-it-yourself auto parts store, is an interesting example of how consumers are hunkering down in tough times.

Here’s a long-term chart going back to 1998…

See larger image

You’ll see AutoZone’s stock was lackluster during the tech bubble run-up… that makes sense.

After the tech bubble popped, AutoZone’s stock was up 286% while the S&P500 dropped almost 50%.

Then AutoZone’s real success began in 2009. Following a 55% sell off in the S&P500, AutoZone has rallied 336% to date.

I haven’t peaked under the hood of AutoZone’s annual report yet. But if a strong stock price is any indication of what cash-strapped consumers are doing… the message is clear:

In tough times, car owners are turning to AutoZone.

And with stock performance like this, investors should do the same! But not just yet… after a run-up as steep as AutoZone’s, we’d be wise to wait for a pullback to cheaper prices.

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Categories: Markets

About Author

As the managing editor for Economy & Markets, Chris works directly with Harry Dent, Rodney Johnson, and the rest of the Dent Research team to bring you their economic analysis and market insight six days a week. Prior to working for Dent Research, Chris was an English teacher in Baltimore City.