Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

AutoNation, Inc. (AN), CarMax, Inc (KMX): A Safe Drive for Your Portfolio

Apart from this, Asbury Automotive Group, Inc. (NYSE:ABG)’s gross profit incremented 16% as an outcome of increased sales volume and the repurchasing of 5 million shares.

As far as the forward-looking statements are concerned, the management of the company stated that the acquisitions of Bentley and Volkswagen franchises last December are followed up by the obtainment of Hyundai Motor Co (KRX:005380), Kai, and Toyota Motor Corporation (ADR) (NYSE:TM) franchises in the Atlanta market. With the prominent cash influx during the previous quarter, and the extended investment in the business, a marginally better performance in the foreseeable future won’t be surprising.

The problems for AutoNation don’t end here as there is another company capable of damaging its success. CarMax, Inc (NYSE:KMX), an inferior competitor of AutoNation, released its quarterly earnings last month. To the surprise of many, the company posted a profit of $146.7 million; this is a rise of 21.5% as compared to the preceding fiscal year, which amounted to $120.7 million.

The company also generated revenue of $3.3 billion, which beat the consensus estimate of $3.1 billion. CarMax, Inc (NYSE:KMX)’s margins were largely driven by the increased sales of used vehicles, which compensated for the loss incurred in the sales of new vehicles. The extensive focus on the sales of used cars bailed the company out, as the gross profit increased 17.3% to $448 million.

CarMax, Inc (NYSE:KMX) is planning to open around 15 stores every year for the next two years and the developments are right on track, as the company had already established five new stores before the end of the preceding quarter. Cutting down on expenses has also helped the company to post a profit and concentrate on the opening of new stores, but CarMax, Inc (NYSE:KMX) needs to step up its effort if it really wants to challenge AutoNation.

Thoughtful abstract

In my opinion, AutoNation is well set to outsmart its competitors and if you’re looking for long-term success, then investing in the company may prove to be a good deal. Due to the stiff competition, the increase may not be exponential, but the company’s planned acquisitions will quite possibly enable it to sustain slow and steady growth.

Ayush Singh has no position in any stocks mentioned. The Motley Fool recommends CarMax. The Motley Fool owns shares of Asbury Automotive Group (NYSE:ABG).
Ayush is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article A Safe Drive for Your Portfolio originally appeared on is written by Ayush Singh.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.