The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider CarMax Inc (NYSE:KMX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is CarMax Inc (NYSE:KMX) the right investment to pursue these days? Hedge funds were getting less bullish. The number of long hedge fund bets fell by 3 recently. CarMax Inc (NYSE:KMX) was in 36 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 54. Our calculations also showed that KMX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s take a look at the fresh hedge fund action regarding CarMax Inc (NYSE:KMX).
Sander Gerber of Hudson Bay Capital
Do Hedge Funds Think KMX Is A Good Stock To Buy Now?
At the end of September, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in KMX over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in CarMax Inc (NYSE:KMX) was held by Akre Capital Management, which reported holding $909.7 million worth of stock at the end of September. It was followed by Giverny Capital with a $148.4 million position. Other investors bullish on the company included Wallace R. Weitz & Co., Silver Heights Capital Management, and Makaira Partners. In terms of the portfolio weights assigned to each position Silver Heights Capital Management allocated the biggest weight to CarMax Inc (NYSE:KMX), around 20.65% of its 13F portfolio. Lansing Management is also relatively very bullish on the stock, designating 12.62 percent of its 13F equity portfolio to KMX.
Due to the fact that CarMax Inc (NYSE:KMX) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few funds that elected to cut their positions entirely in the third quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest position of all the hedgies followed by Insider Monkey, totaling close to $38.1 million in stock, and Phill Gross and Robert Atchinson’s Adage Capital Management was right behind this move, as the fund dumped about $22.9 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to CarMax Inc (NYSE:KMX). These stocks are Cerner Corporation (NASDAQ:CERN), Ameren Corporation (NYSE:AEE), CGI Inc. (NYSE:GIB), Charles River Laboratories International Inc. (NYSE:CRL), Essex Property Trust Inc (NYSE:ESS), MGM Resorts International (NYSE:MGM), and Trimble Inc. (NASDAQ:TRMB). This group of stocks’ market caps are similar to KMX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CERN | 36 | 1279936 | -2 |
| AEE | 14 | 298780 | -9 |
| GIB | 18 | 336354 | 4 |
| CRL | 46 | 1294531 | 2 |
| ESS | 21 | 264061 | 0 |
| MGM | 50 | 2740827 | -9 |
| TRMB | 34 | 1814792 | 7 |
| Average | 31.3 | 1147040 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $1147 million. That figure was $1544 million in KMX’s case. MGM Resorts International (NYSE:MGM) is the most popular stock in this table. On the other hand Ameren Corporation (NYSE:AEE) is the least popular one with only 14 bullish hedge fund positions. CarMax Inc (NYSE:KMX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KMX is 52.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on KMX as the stock returned 10.4% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Carmax Inc (NYSE:KMX)
Follow Carmax Inc (NYSE:KMX)
Suggested Articles:
- 15 Biggest Waste Management Companies
- Billionaire David Tepper’s Top 10 Stocks
- Top 20 Gold Mining Companies
Disclosure: None. This article was originally published at Insider Monkey.
