ផែនការ Exec Comp ដែលមានគុណភាពកាត់បន្ថយហានិភ័យនៃការវិនិយោគនៅក្នុង AutoZone ។

Recap from June Picks

The Exec Comp Aligned with ROIC Model Portfolio (+5.6%) outperformed the S&P 500 (+0.8%) from June 15, 2023 through July 12, 2023. The best performing stock in the portfolio was up 19%. Overall, 13 out of the 15 Exec Comp Aligned with ROIC Stocks outperformed the S&P from June 15, 2023 through July 12, 2023.

ផលប័ត្រគំរូនេះរួមបញ្ចូលតែភាគហ៊ុនដែលទទួលបានចំណាត់ថ្នាក់ដ៏គួរឱ្យទាក់ទាញ ឬទាក់ទាញខ្លាំង និងតម្រឹមសំណងប្រតិបត្តិជាមួយនឹងការកែលម្អ ROIC ។ ខ្ញុំគិតថាការរួមផ្សំគ្នានេះផ្ដល់នូវបញ្ជីគំនិតវែងឆ្ងាយដែលត្រូវបានពិនិត្យយ៉ាងល្អិតល្អន់ ពីព្រោះការត្រឡប់មកវិញលើដើមទុនដែលបានវិនិយោគ (ROIC) គឺជាកត្តាជំរុញចម្បងនៃការបង្កើតតម្លៃភាគហ៊ុនិក។

New Stock Feature for July: AutoZone

អេហ្សូ

AutoZone (AZO) is the featured stock in July’s Exec Comp Aligned with ROIC Model Portfolio. I originally made AutoZone a Long Idea in February 2014 and reiterated it in January 2022, and the stock remains undervalued.

AutoZone has grown revenue and net operating profit after tax (NOPAT) by 7% and 10% compounded annually, respectively, since 2012. The company’s NOPAT margin improved from 13% in 2016 to 16% in the trailing twelve months (TTM), while invested capital turns rose from 1.8 to 2.2 over the same time. Rising NOPAT margins and invested capital turns drive the company’s return on invested capital (ROIC) from 23% in 2016 to 36% in the TTM.

Figure 1: AutoZone’s Revenue & NOPAT: 2012 – TTM

សំណងប្រតិបត្តិ តម្រឹមការលើកទឹកចិត្តឱ្យបានត្រឹមត្រូវ

AutoZone’s executive compensation plan aligns the interests of executives and shareholders by tying its annual incentive awards to economic profit, which, similar to my economic earnings, is driven by NOPAT and ROIC. According to AutoZone’s proxy statement, the company uses economic profit because it “ensures that growth, as well as the cost of growth, are balanced and achieved in a manner that maximizes the long-term interests of our shareholders.”

The company’s inclusion of economic profit, which is primarily driven by ROIC, as a performance goal has helped create shareholder value by driving higher ROIC and economic earnings. When I calculate ROIC using my superior fundamental data, I find that AutoZone’s ROIC has increased from 25% in 2012 to 36% in the TTM. Economic earnings rose from $963 million to $2.3 billion over the same time.

Figure 2: AutoZone’s ROIC: 2012 – TTM

AZO Has Further Upside

At the current price of $2,505/share, AZO has a price-to-economic book value (PEBV) ratio of 1.3. Though the company’s PEBV ratio is higher than other Long Ideas, I believe AutoZone’s competitive moat positions it for further growth and the stock still holds upside potential.

Even if AutoZone’s NOPAT margin falls to 14% (10-year average, compared to 16% in the TTM) and the company’s revenue grows 7% compounded annually over the next decade (equal to compound annual growth rate over past decade), the stock would be worth $3,016/share today – a 20% upside. See the math behind this reverse DCF scenario. In this scenario, AutoZone’s NOPAT grows 6% compounded annually through 2032.

For reference, AutoZone has grown NOPAT by 10% compounded annually since 2012. Should the company grow NOPAT more in line with historical growth rates, the stock has even more upside.

ព័ត៌មានលម្អិតសំខាន់ៗត្រូវបានរកឃើញនៅក្នុងឯកសារហិរញ្ញវត្ថុដោយបច្ចេកវិទ្យារ៉ូបូត - វិភាគរបស់ក្រុមហ៊ុនខ្ញុំ

Below are specifics on the adjustments I made based on Robo-Analyst findings in AutoZone’s 10-Qs and 10-K:

របាយការណ៍ប្រាក់ចំណូល៖ ខ្ញុំបានធ្វើការកែតម្រូវចំនួន 411 លានដុល្លារ ជាមួយនឹងឥទ្ធិពលសុទ្ធនៃការដកចេញ 253 លានដុល្លារនៅក្នុងការចំណាយដែលមិនដំណើរការ (1% នៃប្រាក់ចំណូល)។

Balance Sheet: I made $1 billion in adjustments to calculate invested capital with a net increase of $332 million. One of the largest adjustments was $301 million (4% of reported net assets) in other comprehensive income.

Valuation: I made $12.1 billion in adjustments, with a net effect of decreasing shareholder value by $12 billion. Apart from total debt, the most notable adjustment to shareholder value was $1.4 billion in value of outstanding ESO’s after tax. This adjustment represents 3% of AutoZone’s market value.

ការបង្ហាញ៖ David Trainer, Kyle Guske II, Hakan Salt, និង Italo Mendonça មិនទទួលបានសំណងក្នុងការសរសេរអំពីភាគហ៊ុន រចនាប័ទ្ម ឬប្រធានបទជាក់លាក់ណាមួយឡើយ។