7 Best Used Car Stocks To Buy According to Hedge Funds

4. AutoNation, Inc. (NYSE:AN)

Number of Hedge Fund Investors: 40

AutoNation Inc. (NYSE:AN) is one of the best used-car stocks to buy, according to hedge funds. On January 16, JPMorgan upgraded AutoNation Inc. (NYSE:AN) to an Overweight from Neutral and set a $235 price target.

The price target hike underscores JPMorgan’s confidence that the company has the most visible earnings-revision trajectory among its peers in the auto retail sector. The investment bank has also touted the steady pace of share buybacks, which underscores its focus on shareholder value, backed by a robust balance sheet. AutoNation’s execution has not been perfect; JPMorgan expects the company to benefit from its brand mix of high domestic representation and a US-only regional footprint. Consequently, it expects its organic performance to be in line or slightly better than that of its peers.

The remarks come on the backdrop of the company moving to strengthen its footprint with the acquisition of Jerry’s Toyota in Baltimore for $123 million. The acquisition is expected to generate about $123 million in annual revenue, driven by its 2,600 new and used vehicle sales.

AutoNation, Inc. (NYSE:AN) is the largest automotive retailer in the United States, operating over 300 locations to sell new and used vehicles, parts, and accessories. The company provides comprehensive services, including financing, insurance, maintenance, collision repair, and vehicle reconditioning.