Here’s a Reason to Invest in CarMax (KMX)

Giverny Capital, an asset management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of 10.73% was delivered by the fund for the fourth quarter of 2021, slightly below its benchmark, the S&P 500 Index, which delivered an 11.03% gain for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Giverny Capital Asset Management, in its Q4 2021 investor letter, mentioned CarMax, Inc (NYSE: KMX) and discussed its stance on the firm. CarMax, Inc is a Richmond, Virginia-based retailer company with a $17.3 billion market capitalization. KMX delivered a -17.57% return since the beginning of the year, while its 12-month returns are down by -10.17%. The stock closed at $107.35 per share on February 25, 2022.

Here is what Giverny Capital Asset Management has to say about CarMax, Inc in its Q4 2021 investor letter:

“As for the rest of our top 10 holdings, Carmax finished 2021 as our second-largest holding and it simply plows ahead, turning in good results even though much of the market seems skeptical of its model. Carmax continues to take market share profitably in the massive used car market. It seems to have disappointed some investors by not generating even more profit in recent months, as used car prices soared. But Carmax has always been very clear that it will maintain its mark-ups on cars at about $2,100 per vehicle, even as retail prices ebb and flow. That practice provides customers with a fair deal and shareholders with a good return. Carmax shares rose 38% in 2021 but have been quite weak to start 2022.”

Photo by Dean Brierley on Unsplash

Our calculations show that CarMax, Inc (NYSE: KMX) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. KMX was in 35 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 36 funds in the previous quarter. CarMax, Inc (NYSE: KMX) delivered a -26.35% return in the past 3 months.

In September2021, we also shared another hedge fund’s views on KMX in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.