| Company Name: CarMax, Inc | Stock Symbol: KMX | Industry: Auto Retail |
| Percent Appreciation: 6,652% | Number of Bags: 66.5 | Holding Period: 14.5 Years |
| Entry Date & Price: Jan of 2000 | Exit Date & Price: Current | Date Of Analysis: June, 2014 |
Company Description: CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. It operates in two segments, CarMax Sales Operations and CarMax Auto Finance. It sells vehicles that do not meet its retail standards to licensed dealers through on-site wholesale auctions, as well as sells new vehicles under franchise agreements. The company also provides customers financing alternatives through its finance operation, CarMax Auto Finance, as well as through its third-party financing providers.
Quick Trading Overview & Objective: The company went public in February of 1997 at $10. By January of 2000, the stock price proceeded to collapse to $0.75 or over 90%. It is from this January of 2000 bottom that the company has staged an impressive multiyear rally of 6,652% (as of 6/26/2014 @ $50.64).
We will now go back in time and take an in depth look at the company in order to determine if we could have taken a long position in early 2000. More importantly, we will look at CarMax’s fundamental/trading patterns over the last 14 years to ascertain if we would have been able to maintain our position over such an extended period of time in order to walk away with such massive gains.
FUNDAMENTAL ANALYSIS:
What strikes one immediately is how short of a window investors had to purchase this stock at the bottom. After hitting a bottom in January of 2000, investors only had 16 months to purchase this stock below $5. In fact, anyone who purchased this stock after May of 2001 would not be holding a Tenbagger today. Making 1999-2001 period crucial in CarMax’s turnaround story and an important period for us to study.
To Be Continued……
Kicking The Tires. The Story Of CarMax (10 Bagger Book) Google