Macro Headwinds Impacted CarMax (KMX) in Q1

Alphyn Capital Management, an investment management firm, released its first-quarter 2023 investor letter. The same can be downloaded here. The fund returned 7.5% (net) in the first quarter compared to a 7.5% return for the S&P500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Alphyn Capital Management highlighted stocks like CarMax, Inc. (NYSE:KMX) in the first quarter 2023 investor letter. Headquartered in Richmond, Virginia, CarMax, Inc. (NYSE:KMX) is a used vehicle retailer. On April 26, 2023, CarMax, Inc. (NYSE:KMX) stock closed at $67.92 per share. One-month return of CarMax, Inc. (NYSE:KMX) was 11.16%, and its shares lost 23.77% of their value over the last 52 weeks. CarMax, Inc. (NYSE:KMX) has a market capitalization of $10.738 billion.

Alphyn Capital Management made the following comment about CarMax, Inc. (NYSE:KMX) in its Q1 2023 investor letter:

“Despite contributing positively to the portfolio, CarMax, Inc. (NYSE:KMX)’s performance ranked among the bottom five positions during a period when most of our holdings experienced gains.

CarMax suffers from difficult macro conditions coinciding with increased investment as car retail is increasingly moving online.

High prices (stemming from COVID-induced supply constraints on new cars and increased demand due to stimulus money filtered down to the used car market) have impacted used car affordability. Meanwhile, recent interest rate hikes have worsened the situation. CarMax has surrendered some market share to maintain gross margins in this more challenging market, while CarMax Auto Finance (CAF), which generates profits from the spread between auto loan rates charged to consumers and rates paid in securitization markets, has faced squeezed margins…’’ (Click here to read the full text)

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CarMax, Inc. (NYSE:KMX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held CarMax, Inc. (NYSE:KMX) at the end of the fourth quarter which was 25 in the previous quarter.

We discussed CarMax, Inc. (NYSE:KMX) in another article and shared the list of best used car stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.

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