Investors Are Afraid to Own These 2 Stocks, and That's a Mistake

Everyone loves the adage "buy low and sell high," as if investing were only so simple. Usually when a stock is trading at lower valuations than it has previously, it's because something is materially wrong in the business model itself, or the general industry it operates in. There are, of course, exceptions to the rule -- and while many investors are scared to own AutoZone (NYSE: AZO) and General Motors (NYSE: GM), for reasons we'll cover, you might want to take another look.

Per earnings estimates from Morningstar.com, AutoZone trades at a paltry 11.2 times forward earnings, and the stock has shed roughly a quarter of its value year to date despite a rebound in August and September. It's no surprise that investors are afraid to own shares of AutoZone. After all, Amazon.com (NASDAQ: AMZN) has disrupted a number of industries from books to apparel, and has started to creep into grocery stores with the recent acquisition of Whole Foods; do-it-yourself auto parts could be next.

Amazon's looming threat to the industry has AutoZone focusing on growing its commercial, or do-it-for-me, sales. The difference is that while the do-it-yourself person will walk into an AutoZone store and purchase what he or she needs, an entire segment of commercial repair shops and service stations also need critical components promptly to fix their customers' vehicles. That commercial do-it-for-me market will be more difficult for Amazon to disrupt, as those repair shops need more specialized parts, and the ability to get them quickly -- and to return or exchange, if necessary, just as quickly.

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Source: Fool.com