In today’s content analysis, we take a closer look at the Q2 results for Autozone (AZO), which we have held in our US-Large model portfolio for 2 years now. Autozone represents one of the most important positions in that portfolio at 5.1%. 
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Autozone is definitely one of the strongest US companies as it offers the best combination of high economic performance and a steady growth rate. Over the last five years, the return on capital has remained high at a value between 30% and 31.5%, the cost of capital between 6% and 6.2%, and this while the invested capital has increased by around 8% per year. As of today, the NOPAT is at its highest historical value at around $1.5B USD.
The intrinsic value for Autozone has continued to grow and has now reached $955.71. This represents a potential appreciation of 25% in relation to the closing price of March 9th. Given the excellent historical performance of the company and the historical growth of the operating value of 7.6% per year, the 21.7% premium illustrated by the future growth value is reasonable.
The EVA curve is exactly what we are looking for: positive, growing on the long term, and predictable.
Autozone’s accounting performance is also enviable. It offers a constant growth in terms of sales, earnings, and positive free cash flows. The company equally engages in several buybacks, on average 6% of the outstanding shares per year, to reward shareholders.
