In today’s episode, Shawn O’Malley (@Shawn_OMalley_) breaks down AutoZone, ticker: AZO, a 100-bagger stock that continues to wow investors with its massive share repurchases after already buying back more than 90% of its total shares outstanding in the past two decades. AutoZone is a seemingly mundane auto parts retailer, a common store you’ve probably driven past or visited dozens of times, but its returns on capital are anything but average. 

Shawn goes through the company’s surprising origin story, how it scaled nationwide and internationally with a simple business model, why the business is so profitable and why it has been able to fend off Amazon so well, and whether this quality stock is attractively valued today, plus so much more!

Prefer to watch? Click here to watch this episode on YouTube.

IN THIS EPISODE, YOU’LL LEARN

00:00 - Intro

05:51 - How AutoZone was born out of a family grocery chain.

11:30 - How AutoZone leverages “mega hubs” to keep an inventory of over 100,000 SKUs.

13:45 - Why AutoZone is able to boost its free cash flows with negative working capital.

13:45 - How is AutoZone able to repurchase so much of its stock? 

28:37 - What has made the company so resistant to e-commerce and pressures from Amazon? 

35:58 - Why AutoZone’s customers are price insensitive and value service quality more than anything.

53:40 - Where AutoZone is expanding internationally and how that affects the business’s growth prospects.

59:59 - How to think about the company’s intrinsic value and how expected returns fluctuate based on your purchase price per share.

01:05:05 - Whether Shawn adds AutoZone to The Intrinsic Value Portfolio.

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

• Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
• Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.
• Value Investors Club post on AZO.
• Quartr’s deep dive into AZO.
• CNBC on how AutoZone has fended off Amazon.
• Attend the 2025 Berkshire Hathaway shareholder meeting and meet-ups with The Investors Podcast Network
• Check out the books mentioned in the podcast here.
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