4. CarMax, Inc. (NYSE:KMX)
Bancroft’s Stake Value: $56,487,000
Percentage of Thomas Bancroft’s 13F Portfolio: 11.2%
Number of Hedge Fund Holders: 39
CarMax, Inc. (NYSE: KMX), through its subsidiaries, operates as a retailer of used vehicles in the United States. The company operates in two segments, namely, CarMax Sales Operations and CarMax Auto Finance. It offers customers a range of makes and models of used vehicles, including domestic, imported, and luxury vehicles; and extended protection plans to customers at the time of sale, as well as sells vehicles that are approximately 10 years old. CarMax, Inc. (NYSE: KMX) also provides reconditioning and vehicle repair services; and financing alternatives for retail customers across a range of credit spectrum through its CarMax Auto Finance and arrangements with various financial institutions. As of February 28, 2021, it operated approximately 220 used car stores and 1 new car franchise. CarMax, Inc. (NYSE: KMX) was founded in 1993 and is based in Richmond, Virginia.
This July, BofA analyst John Murphy raised the firm’s price target on CarMax, Inc. (NYSE: KMX) from $150 to $200 and kept a Buy rating on the shares.
According to the latest filings, Makaira Partners owned over 437,000 shares in the firm at the end of June 2021 worth $56.4 million, representing 11.2% of the portfolio.
As of the fiscal first quarter of 2022, CarMax, Inc. (NYSE: KMX) reported an EPS of $2.63, beating estimates by $0.99. Total revenue grew 138.41% year over year to $7.70 billion beating estimates by $1.51 billion. On top of this, the share price of CarMax, Inc. (NYSE: KMX) has grown by 5.29% over the past 6 months and 50.36% year to date.
By the end of the second quarter of 2021, 39 hedge funds out of the 873 tracked by Insider Monkey held stakes in CarMax, Inc. (NYSE: KMX) worth about $1.62 billion. This is compared to 46 hedge funds in the previous quarter with a total stake value of approximately $2.03 billion.
Giverny Capital, an asset management firm, published its second-quarter 2021 investor letter. The fund mentioned CarMax, Inc. (NYSE: KMX) and discussed its stance on the firm. Here’s what they had to say:
“We’re quite optimistic about Carmax, our second largest position. For several years, investors have gravitated to a thesis that a handful of start-ups that sell used cars in an online-only format will end up with a lower cost structure than Carmax. This even though Carmax appears today to have lower costs to buy used cars for its inventory, recondition them for resale and transport them to stores – all problems that are not solved by a good web site. Carmax also amortizes its national advertising over a much larger sales base than competitors, giving it lower marketing expense per vehicle…”
