Ariel Investments, an investment management company, released its “Ariel Appreciation Fund” second-quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the Ariel Appreciation fund gained +5.04% ahead of the Russell Midcap Value Index’s +3.86% return while trailing the Russell Midcap Index’s +4.76% return. The average annual returns of Ariel Appreciation Fund (investor class) for the 1-, 5-, and 10-year periods ended June 30, 2023, were +15.95%, +6.14%, and +8.01%, respectively. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Ariel Appreciation Fund highlighted stocks like CarMax, Inc. (NYSE:KMX) in the second quarter 2023 investor letter. Headquartered in Richmond, Virginia, CarMax, Inc. (NYSE:KMX) is a used vehicle retailer. On September 8, 2023, CarMax, Inc. (NYSE:KMX) stock closed at $81.18 per share. One-month return of CarMax, Inc. (NYSE:KMX) was -4.99%, and its shares lost 10.87% of their value over the last 52 weeks. CarMax, Inc. (NYSE:KMX) has a market capitalization of $12.843 billion.
Ariel Appreciation Fund made the following comment about CarMax, Inc. (NYSE:KMX) in its Q2 2023 investor letter:
“Several stocks in the portfolio had strong returns over the period. Used and wholesale vehicle auction operator, CarMax, Inc. (NYSE:KMX), increased in the quarter as better than expected bottom-line results helped offset a decline in pre-owned vehicle sales. Affordability remains a key issue, as inflation, rising interest rates, tightening lending standards and low consumer confidence continue to present challenges. Wholesale unit sales also declined, however total buys from consumers and dealers improved sequentially. Despite these near-term headwinds, KMX continues to successfully execute on its cost reduction initiatives to rationalize expenses and increase efficiencies. These actions delivered strong gross profit margins in the quarter as well as market share gains. In our view, KMX’s inventory management expertise, brand and scale are difficult to replicate. Looking out, we believe the company has a long runway for growth as its omni-channel presence and initiatives targeted at personalizing the consumer experience seamlessly combine the company’s world-class in-store experience and online offerings.”
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CarMax, Inc. (NYSE:KMX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held CarMax, Inc. (NYSE:KMX) at the end of second quarter which was 38 in the previous quarter.
We discussed CarMax, Inc. (NYSE:KMX) in another article and shared Weitz Partners III Opportunity Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
