Rising Interest Rates Impacted CarMax (KMX)

Diamond Hill Capital, an investment management company, released its “Large Cap Strategy” third-quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the strategy performed roughly in line with the Russell 1000 Index. Early indications of consumer weakness among select merchants and a significant increase in interest rates impacted the portfolio in the third quarter. The strategy returned -3.04% net of fees compared to -3.15% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2023.

Diamond Hill Large Cap Strategy highlighted stocks like CarMax, Inc. (NYSE:KMX) in the third quarter 2023 investor letter. Headquartered in Richmond, Virginia, CarMax, Inc. (NYSE:KMX) is a used vehicle retailer. On November 20, 2023, CarMax, Inc. (NYSE:KMX) stock closed at $65.04 per share. One-month return of CarMax, Inc. (NYSE:KMX) was 4.90%, and its shares lost 3.13% of their value over the last 52 weeks. CarMax, Inc. (NYSE:KMX) has a market capitalization of $10.32 billion.

Diamond Hill Large Cap Strategy made the following comment about CarMax, Inc. (NYSE:KMX) in its Q3 2023 investor letter:

“Several of our bottom contributors were in the consumer area, including auto retailer CarMax, Inc. (NYSE:KMX) and auto manufacturer General Motors. In general, rising interest rates have priced out a large portion of the population who simply can’t afford to buy a car given where financing costs stand today. These challenges have weighed on both companies.”

Image: Courtesy of Carmax

CarMax, Inc. (NYSE:KMX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held CarMax, Inc. (NYSE:KMX) at the end of second quarter which was 38 in the previous quarter.

We discussed CarMax, Inc. (NYSE:KMX) in another article and shared Madison Mid Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.

Suggested Articles:

• Billionaire Steven Cohen’s Top High Dividend Stock Picks
• 20 Most Valuable Gas Companies in the World
• 15 Largest Wool Producing Countries in the World

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