10 Best Used Car Stocks To Buy According to Hedge Funds

8. Asbury Automotive Group Inc. (NYSE:ABG)

Number of Hedge Fund Investors: 30

Asbury Automotive Group Inc. (NYSE:ABG) is one of the largest automotive retailers in the United States, operating 153 new vehicle dealerships and 37 collision repair centers across various states. The company offers a wide range of services, including the sale of new and used vehicles, vehicle repair and maintenance, and finance and insurance products. Asbury is committed to enhancing the customer experience through innovative technologies like its online car-buying platform, Clicklane.

The company’s diverse revenue base, along with its commitment to operational excellence across its dealership portfolio, delivers a resilient business model.

During the CDK outage, which impacted several automotive companies, Asbury Automotive Group Inc. (NYSE:ABG) effectively utilized its omni-channel platform, ClickLane, to continue selling vehicles. The company facilitated over 15,200 sales through Clicklane in the second quarter of 2024, an all-time record. This innovative approach allowed the company to mitigate the impact of the outage on its financial performance. As a result, Asbury delivered a record second-quarter total revenue of $4.2 billion, an increase of 13% year-over-year, and record second-quarter parts and service revenue with $581 million and gross profit of $340 million.

Asbury Automotive Group Inc. (NYSE:ABG) has managed to grow its top line at a compound annual growth rate (CAGR) of 10.97% over the past ten years. The company is focused on improving its profit margins, especially within its service business, which showed positive results in the second quarter with increased revenue from services. The company is also building investor confidence through smart capital allocation strategies that balance acquisitions, organic growth, and share buybacks. In the second quarter, Asbury repurchased $43 million in shares. By pursuing these strategies, the company aims to expand its market share, enhance its overall value, and deliver returns to its shareholders.

In the second quarter of 2024, 30 hedge funds held stakes in Asbury Automotive Group Inc. (NYSE:ABG), with a total investment value of $1.37 billion. Abrams Capital Management emerged as the largest shareholder, owning 2.1 million shares of the company. ABG ranks 8th on our list of the best used car stocks to buy according to hedge funds.