5 Best Used Car Stocks to Buy

2. CarMax, Inc. (NYSE: KMX)

Number of Hedge Fund Holders: 46   

CarMax, Inc. (NYSE: KMX) stock has offered investors returns exceeding 37% over the course of the past year. It is placed second on our list of 10 best used car stocks to buy. The firm runs a used vehicle retailer and is based in Virginia. It has a market cap of close to $22 billion and posted more than $20 billion in revenue in the last fiscal year. The firm recently beat market expectations on earnings per share and revenue for the first fiscal quarter, reporting a 138% year-on-year increase in revenue in the earnings report. 

On July 16, investment advisory Bank of America maintained a Buy rating on CarMax, Inc. (NYSE: KMX) stock and raised the price target to $200 from $150, underlining that the firm would beat earnings expectations for the second quarter. 

Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in CarMax, Inc. (NYSE: KMX) with 7.1 million shares worth more than $943 million. 

In its Q1 2021 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and CarMax, Inc. (NYSE: KMX) was one of them. Here is what the fund said:

“Beyond the benefit of ‘reopening,’ gains were led by companies experiencing positive, company-specific developments. Used car dealer CarMax was our top contributor, as the nationwide roll-out of its omnichannel car buying experience (at a dealership, online, or a combination of the two) continues to win fans in the form of new customers and investors alike.”