5 Best Small Cap Automotive Stocks To Buy

3. OPENLANE, Inc. (NYSE:KAR)

Number of Hedge Fund Holders: 17

OPENLANE, Inc. (NYSE:KAR) operates a digital marketplace for used vehicles. It serves as a platform connecting sellers and buyers in multiple regions, including North America, Europe, the Philippines, and Uruguay. OPENLANE, Inc. (NYSE:KAR) is one of the best automotive stocks to invest in. On May 2, the company reported Q1 GAAP earnings per share of $0.01, in line with market consensus. Revenue for the quarter increased 13.9% year-over-year to $420.6 million, outperforming Wall Street estimates by $33.12 million. 

According to Insider Monkey’s first quarter database, 17 hedge funds  were bullish on OPENLANE, Inc. (NYSE:KAR), compared to 19 funds in the prior quarter. Amy Minella’s Cardinal Capital is the largest stakeholder of the company, with 5 million shares worth $69 million. 

White Brook Capital made the following comment about KAR Auction Services, Inc. (NYSE:KAR) in its Q1 2023 investor letter:

“KAR Auction Services, Inc. (NYSE:KAR): More constrained banks have resulted in higher yields for incumbent non-bank dealer floor plan financing companies. This should positively impact the ability of KAR, a very large dealer floor plan lender, to lend profitably at higher yields.

KAR’s loans are typically installment loans where the principal must be paid along with interest.  Higher yields on still-high used car prices should incentivize dealers to wholesale cars they cannot retail more quickly and to accept lower bids for those cars when they do try to wholesale them. This is a positive for the fundamentals of both company divisions that has gone largely unappreciated.”