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Is CarMax, Inc (KMX) A Good Stock To Buy?

Since CarMax, Inc (NYSE:KMX) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedgies that elected to cut their positions entirely heading into Q4. Interestingly, Bain Capital’s Brookside Capital dropped the biggest stake of the 700 funds monitored by Insider Monkey, valued at close to $148.7 million in stock, and Alexander Mitchell’s Scopus Asset Management was right behind this move, as the fund sold off about $72.4 million worth. These transactions are interesting, as total hedge fund interest dropped by 13 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CarMax, Inc (NYSE:KMX) but similarly valued. These stocks are Akamai Technologies, Inc. (NASDAQ:AKAM), Macerich Co (NYSE:MAC), Plains All American Pipeline, L.P. (NYSE:PAA), and CA, Inc. (NASDAQ:CA). All of these stocks’ market caps are closest to KMX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AKAM 37 964219 -2
MAC 21 431708 -8
PAA 16 90858 0
CA 25 342514 -1

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $457 million. That figure was $891 million in KMX’s case. Akamai Technologies, Inc. (NASDAQ:AKAM) is the most popular stock in this table. On the other hand Plains All American Pipeline, L.P. (NYSE:PAA) is the least popular one with only 16 bullish hedge fund positions. CarMax, Inc (NYSE:KMX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AKAM might be a better candidate to consider a long position.

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