Is it Still Safe to Acquire CarMax (KMX) Shares?

Claret Asset Management, an asset management firm, published its third quarter 2022 investor letter – a copy of which can be downloaded here. According to the fund, higher interest rates will eventually act as a brake to this economy on steroids that is mainly funded through extreme fiscal largesse and printed money by central banks. The fund invests in companies with real business models that are well-run, have great prospects, and generate positive cash flows for the foreseeable future. Try to spare some time to check the fund’s top 5 holdings for you to have an idea about their best stock picks this 2022.

In its Q3 2022 investor letter, Claret Asset Management mentioned CarMax, Inc. (NYSE:KMX) and explained its insights for the company. Founded in 1993, CarMax, Inc. (NYSE:KMX) is a Richmond, Virginia-based used car company with a $9.8 billion market capitalization. CarMax, Inc. (NYSE:KMX) delivered a -52.09% return since the beginning of the year, while its 12-month returns are down by -54.39%. The stock closed at $62.39 per share on October 13, 2022.

Here is what Claret Asset Management has to say about CarMax, Inc. (NYSE:KMX) in its Q3 2022 investor letter:

“Used car retailer CarMax announced declining sales (in units) for the quarter, citing low consumer confidence. Moreover, loan loss provisions more than doubled, signalling weakening consumer demand due to inflationary pressure and higher financing rates. For whatever reason, the stock market seems to always precede the economic reality: As for CarMax, the stock price has been cut by more than half, dropping from a high of $156 on November 8, 2021, to today’s $66.

Photo by Malusi Msomi on Unsplash

Our calculations show that CarMax, Inc. (NYSE:KMX) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. CarMax, Inc. (NYSE:KMX) was in 28 hedge fund portfolios at the end of the second quarter of 2022, compared to 27 funds in the previous quarter. CarMax, Inc. (NYSE:KMX) delivered a -31.85% return in the past 3 months.

In June 2022, we also shared another hedge fund’s views on CarMax, Inc. (NYSE:KMX) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.

Suggested Articles:

• 13 Best Cybersecurity Stocks To Buy
• Best Bitcoin Stocks To Buy
• Best Casino Stocks To Buy

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