In this article, we discuss 5 best bargain stocks to buy in March. If you want to see more stocks in this selection, check out 12 Best Bargain Stocks To Buy in March.
5. CarGurus, Inc. (NASDAQ:CARG)
Number of Hedge Fund Holders: 21
CarGurus, Inc. (NASDAQ:CARG) is a Massachusetts-based operator of an online automotive marketplace connecting buyers and sellers of new and used cars in the United States and internationally. On February 28, CarGurus, Inc. (NASDAQ:CARG) reported a Q4 non-GAAP EPS of $0.22 and a revenue of $286.7 million, outperforming Wall Street estimates by $0.11 and $5.29 million, respectively. CarGurus, Inc. (NASDAQ:CARG) is one of the best cheap stocks to invest in.
On March 1, Raymond James increased the target price for CarGurus, Inc. (NASDAQ:CARG) from $16 to $20 and maintained an Outperform rating on the stock. CarGurus, Inc. (NASDAQ:CARG) has reported revenue and EBITDA that met expectations, with consistent growth in its Marketplace, but a weaker performance in its Wholesale division. The company has acknowledged ongoing challenges in its Wholesale segment and has stated that it will work to improve profitability by adjusting its operations, the analyst wrote in a research note.
According to Insider Monkey’s fourth quarter database, 21 hedge funds were bullish on CarGurus, Inc. (NASDAQ:CARG), compared to 23 funds in the prior quarter. PAR Capital Management is the largest stakeholder of the company, with 6.7 million shares worth $94.5 million.
Cove Street Capital made the following comment about CarGurus, Inc. (NASDAQ:CARG) in its Q3 2022 investor letter:
“During the quarter, we started a new position in CarGurus, Inc. (NASDAQ:CARG). The company historically has been a lead generation business, helping car dealers find consumers who are looking to buy or sell a car online. CARG has been successful at this by having world-class search engine optimization (SEO) and search engine marketing (SEM) that helps them achieve top search results on Google. Consumers click these top links on Google when buying or selling a car and enter their information on the CARG website, generating a lead for CARG. CARG sells these high-quality leads to dealers for a significant profit (gross margin of 90%+). The lead generation business has hit maturity as CARG has almost penetrated the entire car dealer market in the US. CARG recently bought an Online Dealer to Dealer (D2D) platform, CarOffer, which helps car dealers sell cars to other dealers as well as buy cars from consumers online. There is a large amount of selling synergies between the Online D2D platform and the legacy lead generation business as they are selling to the same customer base: car dealers. CarOffer has been experiencing huge growth as it gains significant market share from physical dealer auctions. We have initiated a position in CARG after the market over punished the stock due to a tough macro environment. Despite the current macro concerns, we feel CARG is still a high margin, high free cash flow generating business with significant room to grow the CarOffer business.”
