ESL Investments decreased its holdings to 20,956,103 shares (39.0%), after selling 454,153 shares from June 19 to June 23 at prices ranging from $155.06 to $157.01 apiece; and it is distributing 2,578,742 shares to partners of its affiliate, Acres Partners.

In addition to Monroe, Cramer said he'd also look into auto parts retailer OReilly Automotive (ORLY). OReilly has the most room to grow, said Cramer, given the company's recent acquisition. He sees limited upside in competitors like AutoZone (AZO) and Advance Auto Parts (AAP). ("Mad Money" Recap, 5-15-09)

Cramer: Auto Parts Play: Jim Cramer points out that auto part retailers are benefiting from the public trying to extend the lives of their cars.
Click here to watch the video.

AutoZone (AZO) and Monro Muffler (MNRO) put up some great earnings.

Cramer: Auto Parts Play: Jim Cramer points out that auto part retailers are benefiting from the public trying to extend the lives of their cars.

Click here to watch the video.

owned it for a while and it goes up

poeple are fixing cars and not buying them

For instance, AutoZone is in this week’s portfolio. The nation’s leading automotive retailer announced that it will repurchase an additional $500 million of the company’s common stock. AutoZone’s ongoing buyback program now totals $7.4 billion; this amount includes the new $500 million authorization.

Bill Giles, AutoZone’s Executive Vice President and CFO commented, “AutoZone's strong financial performance has allowed us to continue to repurchase our stock while maintaining strong credit metrics.” He continued, "Although the financial markets remain challenging, we will continue to utilize share repurchases within the bounds of a disciplined capital structure to enhance stockholder returns while maintaining adequate liquidity to execute our financial plans."

While most stocks have taken a beating over the past year, AutoZone has performed quite well. The S&P 500 index is down about 33% in the past year, while AutoZone’s share price has surged over 25%.

On Dec. 9, 2008 the Memphis-based company reported first quarter results with total sales of $1.5 billion, an increase of 1.6% from the same period last year. Operating income increased half a percent or $1.2 million to $238.5 million. Diluted EPS surged 10.1% to $2.23 a share from $2.02 a share in the year-ago period.

AutoZone opened 30 new stores and replaced two new stores in the U.S. and opened two stores in Mexico during the first quarter. As of November 22, 2008, there were 4,122 stores in the US and 150 stores in Mexico.

After AutoZone reported the solid first quarter, analysts from Gabelli & Company issued a bullish note on the stock. The analysts have a buy rating on the stock noting the company’s strong cash flow generation at 5%-6% a year and management’s dedication to repurchasing shares.

It’s also good to see that Renaissance Technologies owns shares of AutoZone. This New York-based hedge fund was started by Jim Simons in 1982. Simons only hires PhDs and the fund mainly employs computer based models to predict price changes in easily-traded financial instruments. The fund is highly secretive but we know that their top holdings are UST Inc and Wal-Mart.

We also like to see that the D.E. Shaw Group is buying shares of AZO. The D. E. Shaw group is a global investment firm. Since its organization in 1988, the firm has earned an international reputation for financial innovation and an extraordinarily distinguished staff. The D. E. Shaw group encompasses a number of closely related entities with more than 1,000 employees, approximately $50 billion in aggregate investment capital. Their top stocks are Equity Residential and Pfizer.

So we have a new buyback, strong first quarter results, analyst support and two top-notch investment firms buying shares. It might be time to take a closer look at AutoZone.

From a recent Mad Money show:"This is an intriguing name. The stock has had a ramp here. I've been recommending Monro Muffler (MNRO) in the auto sector. I'd rather see you in that one."

Buy - Price 116.50 on Dec. 9
by Kevin Dann & Partners

AutoZone reported 1Q09 EPS of $2.23 (versus $2.02 the prior year), above our estimate and Street consensus of $2.18. Upside came primarily from...AZO's repurchase of 2.2 million shares for $272 million (average price: $122/share). The remaining items were relatively in-line with our forecast. 1Q09 domestic same-store sales declined 1.5% versus a 1.3% increase the prior year; [our forecast was] 1% to 3%. AZO said September was the worst month of the quarter, and that sales normalized in October through November's end...trends indicate that AutoZone may be better weathering the current environment than its competitors...1Q09 gross margin increased 20 basis points (in-line with our expectations) due to category-management initiatives and a favorable shift in the margin mix toward higher-margin parts and private-label items. [Sales, general and administrative expense] increased 40 basis points (in-line with our expectations) due to the deleveraging effect of the negative sales results. Target: 135. Market cap: $6.9 billion.

Overvalued and will not grow in the short run.