CarMax, Inc (NYSE:KMX) reported second quarter earnings of $0.82 per share versus expectations of $0.76 per share. Revenue was $3.88 billion, up 7.8% year over year but missing expectations by $100 million. New vehicle sales declined 13.5% year over year, while wholesale vehicle sales increased by 11.6% year over year. Total gross profit per unit rose 13.4% year over year to $3,284.
Although CarMax shares are down by 10% year to date, hedge funds have been bullish. Our data shows that 40 hedge funds owned CarMax, Inc (NYSE:KMX) at the end of June, up from 33 hedge funds in the first quarter. Among the hedge funds that established new positions in the stock were Jim Simons‘ Renaissance Technologies, which bought 45,900 shares, and Joel Greenblatt’s Gotham Asset Management, which acquired 53,418 shares between April and June. The total value of hedge fund holdings declined somewhat to $1.24 billion (equal to 9% of the outstanding stock) at the end of June versus $1.29 billion a quarter earlier. With an analyst target price of $75 per share, a $2 billion share repurchase program, and strong smart money ownership, CarMax also has potential for long-term growth.