Markets

Insider Trading

Hedge Funds

Retirement

Opinion

10 Best Used Car Stocks To Buy Now

In this article, we discuss 10 best used car stocks to buy now. If you want to see more stocks in this selection, check out 5 Best Used Car Stocks To Buy Now

New car inventory is nearly half of what it should be, and dwindling inventories are an indicator of tight supply and demand. Inventories are low because of COVID-19 production disruptions and supply chain constraints. Inventories will normalize gradually, as automakers are not rushing to overproduce vehicles, especially with the aggressive interest rate environment. According to the Manheim Used Vehicle Index, used car prices are up about 45% from pre-pandemic levels, and Federal Reserve data indicated that new-car prices are up about 20% from pre-pandemic levels. 

RBC Capital Markets analyst Joseph Spak wrote in an investor note last week that although auto sentiment is “very poor” due to rampant rate hikes, high prices, low consumer confidence, a looming recession, and a European energy crisis heading into colder months, earnings for the third quarter of 2022 “should mostly be fine,” as market experts focus on management commentary and guidance revisions in the auto sector. He noted that 2023 estimates for the sector need to “move materially lower.”

Although the new and used car industry is going through a rough phase, the auto sector has proven to be resilient over the years and can be a good long-term investment. Used car stocks such as Copart, Inc. (NASDAQ:CPRT), Lithia Motors, Inc. (NYSE:LAD), and CarMax, Inc. (NYSE:KMX) make for smart portfolio additions, especially as they are trading at discounts currently. 

Our Methodology

We selected the following used car stocks based on optimistic analyst coverage, strong underlying business fundamentals, and future growth prospects once the auto industry gains momentum. We have assessed the hedge fund sentiment from Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022. 

Best Used Car Stocks To Buy Now

10. Sonic Automotive, Inc. (NYSE:SAH)

Number of Hedge Fund Holders: 20

Sonic Automotive, Inc. (NYSE:SAH) was incorporated in 1997 and is based in Charlotte, North Carolina. It operates as an automotive retailer in the United States, with two primary segments – Franchised Dealerships and EchoPark. The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, replacement parts, vehicle maintenance, manufacturer warranty repair, arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products for its customers.

On October 6, JPMorgan analyst Rajat Gupta upgraded Sonic Automotive, Inc. (NYSE:SAH) to Overweight from Neutral with a $60 price target. The analyst noted the setup for franchise auto dealers into Q3 earnings is the most negative he has witnessed since the pandemic. He upgraded Sonic Automotive, Inc. (NYSE:SAH) based on his revised price targets for the group.

According to Insider Monkey’s data, 20 hedge funds were long Sonic Automotive, Inc. (NYSE:SAH) at the end of June 2022, compared to 23 funds in the prior quarter. Michael Moriarty’s Teewinot Capital Advisers is the largest stakeholder of the company, with 575,326 shares worth $21 million. 

In addition to Copart, Inc. (NASDAQ:CPRT), Lithia Motors, Inc. (NYSE:LAD), and CarMax, Inc. (NYSE:KMX), Sonic Automotive, Inc. (NYSE:SAH) i s one of the best used car stocks to invest in. 

9. CarGurus, Inc. (NASDAQ:CARG)

Number of Hedge Fund Holders: 23

CarGurus, Inc. (NASDAQ:CARG) is a Massachusetts-based company that operates an online automotive marketplace where buyers and sellers can trade new and used cars in the United States and internationally. On October 3, CarGurus, Inc. (NASDAQ:CARG) announced that it has chosen Amazon Web Services as its global cloud infrastructure provider. The multi-year deal is expected to allow customers an enhanced experience on the CarGurus website. CarGurus, Inc. (NASDAQ:CARG) is one of the best used car stocks to consider. 

On October 18, Truist analyst Naved Khan reaffirmed a Buy rating on CarGurus, Inc. (NASDAQ:CARG) but trimmed the price target on the shares to $31 from $38. The company’s Q3 results are expected to be in-line with his lowered expectations, which largely factor in the negative impact on CarOffer from wholesale price drops and soft retail demand, as per the analyst. 

According to Insider Monkey’s data, 23 hedge funds were long CarGurus, Inc. (NASDAQ:CARG) at the end of the second quarter of 2022, compared to 29 funds in the last quarter. Paul Reeder and Edward Shapiro’s PAR Capital Management is the largest stakeholder of the company, with 4 million shares worth $88 million. 

8. Group 1 Automotive, Inc. (NYSE:GPI)

Number of Hedge Fund Holders: 24

Group 1 Automotive, Inc. (NYSE:GPI) is a Texas-based company that operates in the automotive retail industry, dealing in new and used cars, light trucks, vehicle parts, service and insurance contracts, vehicle financing, and automotive maintenance and repair services. The shares have gained close to 6% in the last month, making Group 1 Automotive, Inc. (NYSE:GPI) a great prospect for value-oriented investors. 

JPMorgan analyst Rajat Gupta on October 6 upgraded Group 1 Automotive, Inc. (NYSE:GPI) to Overweight from Neutral with a $210 price target. The analyst said the sector is not immune to the current macro challenges, and he cut estimates for 2023 “materially” to reflect a mild recession. He believes the auto industry will achieve a new normal by 2025 and upgraded Group 1 Automotive, Inc. (NYSE:GPI) based on his revised price targets for the group.

Among the hedge funds tracked by Insider Monkey, Group 1 Automotive, Inc. (NYSE:GPI) was part of 24 public stock portfolios at the end of June 2022, compared to 25 funds in the earlier quarter. Anthony Bozza’s Lakewood Capital Management is the biggest position holder in the company, with 328,726 shares valued at $55.8 million. 

Here is what ClearBridge Investments Small Cap Value Strategy has to say about Group 1 Automotive, Inc. (NYSE:GPI) in its Q1 2022 investor letter:

“We also initiated a new position in Group 1 Automotive (NYSE:GPI), in the consumer discretionary sector. Group 1 Automotive is one of the leading auto dealership groups in the U.S. and the U.K. Through our analysis, we believe the current stock price already discounts a considerable decline in revenue and profits due to concerns about elevated used car prices and high gross margins per unit. However, we believe this does not reflect the underlying strength of the company’s diversified business line and flexible cost structure. Ultimately, we believe the company will prove more durable than the market expects and be a long-term value creator for the portfolio.”

7. ACV Auctions Inc. (NASDAQ:ACVA)

Number of Hedge Fund Holders: 24

ACV Auctions Inc. (NASDAQ:ACVA) is a New York-based company that connects buyers and sellers for the online auction of wholesale vehicles. It also provides data services to determine the condition and value of used vehicles, in addition to customer financing services. ACV Auctions Inc. (NASDAQ:ACVA) is one of the leading used car stocks to buy now. 

On October 6, Jefferies analyst John Colantuoni maintained a Buy rating on ACV Auctions Inc. (NASDAQ:ACVA) but slashed the price target on the shares to $15 from $17. The analyst trimmed estimates and price targets across U.S. internet in anticipation of a slowing macro environment. However, the correction across the internet sector has created more attractive risk/reward, and ACV Auctions Inc. (NASDAQ:ACVA) offers the most feasible long-term growth profile, contended the analyst. 

Among the hedge funds tracked by Insider Monkey, 24 funds were long ACV Auctions Inc. (NASDAQ:ACVA) at the end of the second quarter of 2022, compared to 34 funds in the earlier quarter. Gavin Baker’s Atreides Management is the largest position holder in the company, with nearly 8 million shares worth $52 million. 

Here is what Meridian Funds specifically said about ACV Auctions Inc. (NASDAQ:ACVA) in its Q2 2022 investor letter:

“ACV Auctions Inc. (NASDAQ:ACVA) operates a digital wholesale auction marketplace to facilitate business-to-business used car sales between sellers and dealers. It has disrupted the traditional physical used-car auction marketplace by attracting thousands of dealers to its online platform. ACV’s competitive advantage is its sizable team of inspectors and the technology tools supporting this team. The depth and accuracy of ACV’s inspection reports provide buyers the confidence to bid aggressively, knowing that they are unlikely to be negatively surprised post purchase. Sellers are drawn to ACV because of its lower auction fees and large buyer base. Despite a challenging operating environment, ACV reported a 49% increase in first-quarter revenue, which was significantly faster than its physical auction peers, implying robust market share gains. However, sentiment for ACV’s stock cooled amid the company’s aggressive investments in its business, which are likely to result in negative free cash flow for the next few years. Further pressuring the stock were concerns that demand for used cars will decline as supply chain disruptions ease and new car production picks up. Our long-term conviction in the company remains high due to its strong fundamentals, healthy balance sheet, and increasing market share. Furthermore, we believe the sale of ADESA, one of ACV’s largest physical auction competitors, to online used-car platform Carvana could provide a tailwind to ACV. Carvana is viewed by used car dealers as a direct competitor, likely causing them to shift volumes from ADESA to ACV. Based on our favorable long-term outlook for the company, we added to our position during the quarter.”

6. Asbury Automotive Group, Inc. (NYSE:ABG)

Number of Hedge Fund Holders: 27

Next on our list of the best used car stocks is Asbury Automotive Group, Inc. (NYSE:ABG), a Georgia-based automotive retailer that offers a range of automotive products and services, including new and used vehicles, vehicle repair and maintenance services, replacement parts, and collision repair services. 

On October 6, investment advisory JPMorgan maintained a Neutral rating on Asbury Automotive Group, Inc. (NYSE:ABG) and lowered the price target on the shares to $185 from $205. Analyst Rajat Gupta issued the ratings update. 

According to the second quarter database of Insider Monkey, 27 hedge funds held stakes worth $1.09 billion in Asbury Automotive Group, Inc. (NYSE:ABG), compared to 29 funds in the prior quarter worth $926 million. Lauren Taylor Wolfe’s Impactive Capital is the largest stakeholder of the company, with 2.20 million shares valued at $372.5 million. 

Like Copart, Inc. (NASDAQ:CPRT), Lithia Motors, Inc. (NYSE:LAD), and CarMax, Inc. (NYSE:KMX), Asbury Automotive Group, Inc. (NYSE:ABG) is one of the top stocks to consider for exposure to the auto industry. 

Here is what LRT Capital Management has to say about Asbury Automotive Group, Inc. (NYSE:ABG) in its Q1 2022 investor letter:

“Asbury Automotive Group is one of the largest automotive retailers in the United States. It operates 90 dealerships consisting of 112 franchises and 25 collision repair centers. The company’s stores offer new and used vehicles, parts, and service, as well as finance and insurance (F&I) products. Franchise agreements controlled by automotive manufactures and state laws create an environment of tightly controlled market entry and restricted competition.

The dealership industry is highly fragmented with 93.5% of dealers having only between 1-5 locations according to data from 2020. In fact, dealers with over 50 locations account for only 0.1% of the industry – a testament to the huge opportunity for consolidation that lies ahead. Industry dynamics, including the rising complexity of automobiles and the need for omnichannel distribution are favoring better capitalized and larger dealer groups. We believe Asbury Automotive Group has several distinct advantages, particularly its highly profitable parts and service business, its overexposure to the luxury vehicle business, which carries the best margins, and its Clicklane omnichannel strategy. Asbury’s management has also been acting in the best interests of its shareholders by allocating capital towards acquiring dealerships to aggressively expand its business, and occasionally repurchasing stock when attractive acquisitions targets could not be found.

ABG is not a fast-growing SaaS business, but when paying a valuation of ¼ of the overall stock market, one does not need to make heroic assumptions about the future to enjoy strong returns as shareholders. We believe that over the next several years, Asbury will continue to acquire dealerships, occasionally buy back stock and invest to improve its digital shopping experience. We wrote about Asbury in detail in our August 2021 Investor Letter.”

Click to continue reading and see 5 Best Used Car Stocks To Buy Now

Suggested articles:

Disclosure: None. 10 Best Used Car Stocks To Buy Now is originally published on Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

I’ve compiled everything you need to know about this groundbreaking company in a detailed, members-only report.

Trust me — you’ll want to read this report before putting another dollar into any tech stock.

For a ridiculously low price of just $9.99 a month, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single fast food meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee:  If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

If you’re thinking about getting in, don’t wait – because once Wall Street catches wind of this story, the easy money will be gone.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99 a month.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a month later!

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 100+% Return within 12 to 24 months.

We’re now offering month-to-month subscriptions with no commitments.

For a ridiculously low price of just $9.99 per month, you can unlock our in-depth investment research and exclusive insights – that’s less than a single fast food meal!

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99.

2. Enjoy a month of ad-free browsing, exclusive access to our in-depth report on the Trump tariff and nuclear energy company as well as the revolutionary AI-robotics company, and the upcoming issues of our Premium Readership Newsletter.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!


No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a month later!