The following video is part of our "Motley Fool Conversations" series, in which consumer goods editor/analyst Austin Smith and industrials editor/analyst Brendan Byrnes discusses topics across the investing world.
In today's edition, Austin and Brendan talk about one market darling that Austin's thumbs-down on: AutoZone. The company has delivered an incredible 192% over the past five years, but Austin thinks the run is done. He boils down the success of the company to two factors: the age of automobiles on the road and the miles driven. As these two things increase, the demand for aftermarket parts grows. The recent recessionary times we've seen have forced people to hang on to their vehicles longer than normal, pushing up the average age of automobiles. But now that major manufacturers are seeing big sales growth again, that trend is likely to end. With gas tipping above $4 a gallon, people could greatly reduce their driving habits as well. While it's been a good run, it looks like it's time to retire this one.
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