Handle With Care: CarMax Inc. (NYSE: KMX)

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Ruane, Cunniff & Goldfarb LP recently announced the acquisition of new stake in CarMax Inc. (NYSE:KMX). The institutional investor has increased its shareholding in the Consumer Cyclical company by 15.26% to 9.16 million shares with purchase of 1.21 million shares. This fresh investment now brings its stake to 5.63% valued currently at $820.65 million. In addition, Principal Global Investors LLC raised its holdings by 0.68 million to 8.5 million shares. And Akre Capital Management LLC has lifted its position by 21.38% or 1.44 million shares – to 8.19 million shares.

With over 0.96 million CarMax Inc. (KMX) shares trading Friday and a closing price of $97.77 on the day, the dollar volume was approximately $93.97 million. The shares have shown a positive weekly performance of 4.73% and its price on 07/24/20 gained nearly 0.32%. Currently, there are 162.67M common shares owned by the public and among those 162.56M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 15 analysts who have offered their price forecasts for KMX have a consensus price objective of $107.00. The analysts have set the share’s price value over the next 12 months at a high of $130.00 and a low of $94.00 should the stock experience a downside. Incidentally, analysts’ outlook for the CarMax Inc. stock is 1.60 for the next 12 months. The average price target is 6.35% above its last price level and an upside to the estimated low will see the stock lose -4.01% over that period. But an upside of 24.79% will see the stock hit the forecast high price target while mean target price for the stock is $105.00.

Insiders at the company have transacted a total of 107 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 60 of these insider trades were purchases, accounting for 1,028,154 shares. Insider sales of the common stock occurred on 47 occasions, with total insider shares sold totaling 967,000 shares.

The top 3 mutual fund holders in CarMax Inc. are Akre Focus Fund, Principal Investors – Mid Cap Fun, and Vanguard Total Stock Market Index. Akre Focus Fund owns 7.83 million shares of the company’s stock, all valued at over $700.96 million. The company bought an additional 1.2 million shares recently to bring their total holdings to about 4.81% of the shares outstanding. Principal Investors – Mid Cap Fun sold 96359.0 shares to see its total holdings shrink to 5.61 million shares valued at over $502.81 million and representing 3.45% of the shares outstanding. Vanguard Total Stock Market Index sold -0.1 million shares to bring its total holdings to over 4.65 million shares at a value of $416.11 million. Vanguard Total Stock Market Index now owns shares totaling to 2.86% of the shares outstanding.

Shares of CarMax Inc. (NYSE: KMX) opened at $97.06, down -$0.4 from a prior closing price of $97.46. However, the script later closed the day at $97.77, up 0.32%. The company’s stock has a 5-day price change of 4.73% and 30.41% over the past three months. KMX shares are trading 11.52% year to date (YTD), with the 12-month market performance up to 7.24% higher. It has a 12-month low price of $37.59 and touched a high of $103.18 over the same period. Currently, 0.96 million shares have been traded, compared to an average intraday trading volume of 1.63 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 6.79%, 8.59%, and 13.34% respectively.

Institutional ownership of CarMax Inc. (NYSE: KMX) 162.67M shares outstanding. Mutual fund holders own 46.03%, while other institutional holders and individual stakeholders account for 55.95% and 3.05% respectively.

It has a market capitalization of $16.00B and a beta (3y monthly) value of 1.72. The stock’s trailing 12-month PE ratio is 25.98, while the earnings-per-share (ttm) stands at $3.76. The company has a PEG of 2.10 and a Quick Ratio of 1.20 with the debt-to-equity ratio at 4.18. Price movements for the stock have been influenced by the stock’s volatility, which stands at 2.53% over the week and 3.03% over the month.

Analysts forecast that CarMax Inc. (KMX) will achieve an EPS of $0.99 for the current quarter, $0.96 for the next quarter and $5.23 for 2022. The lowest estimate earnings-per-share for the quarter is $0.6 while analysts give the company a high EPS estimate of $1.18. Comparatively, EPS for the current quarter was $1.4 a year ago. Earnings per share for the fiscal year are expected to increase by 11.20%, and 67.94% over the next financial year. EPS should shrink at an annualized rate of 12.40% over the next five years, compared to 14.30% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 15 brokerage firm advisors rate CarMax Inc. (KMX) as a “Strong Buy” at a consensus score of 1.60. Specifically, 12 Wall Street analysts polled rate the stock as a buy, while 1 of the 15 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the KMX, a number of firms have released research notes about the stock. JP Morgan stated their Overweight rating for the stock in a research note on June 01, 2020, with the firm’s price target at $105. Wedbush coverage for the CarMax Inc. (KMX) stock in a research note released on May 12, 2020 offered a Outperform rating with a price target of $90. Evercore ISI was of a view on February 07, 2020 that the stock is Outperform, while Evercore ISI gave the stock Outperform rating on February 06, 2020, issuing a price target of. Argus on their part issued Buy rating on June 28, 2019.

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