Giverny Capital Asset Management, LLC, an investment management company, recently published its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The portfolio returned -2.31% in the second quarter compared to a 4.28% return for the S&P 500 Total Return Index. The fund returned 12.31% year to date compared to the 15.29% return for the Index during the same period. The performance was hurt by low exposure to the Magnificent Seven tech stocks. For more information on the fund’s top picks in 2024, please check its top five holdings.
Giverny Capital Asset Management highlighted stocks like CarMax, Inc. (NYSE:KMX) in the second quarter 2024 investor letter. CarMax, Inc. (NYSE:KMX) is a used vehicle retailer headquartered in Richmond, Virginia. One-month return of CarMax, Inc. (NYSE:KMX) was 9.50%, and its shares lost 5.90% of their value over the last 52 weeks. On August 2, 2024, CarMax, Inc. (NYSE:KMX) stock closed at $78.38 per share with a market capitalization of $12.233 billion.
Giverny Capital Asset Management stated the following regarding CarMax, Inc. (NYSE:KMX) in its Q2 2024 investor letter:
“Our holding CarMax, Inc. (NYSE:KMX) continues to scuffle along in what is a very challenging market for used cars, because of both high interest rates and a lack of supply of late model used cars after supply chain issues slowed production in the COVID-19 years. A typical monthly payment on a good used car is more than $100 per month higher today than pre-pandemic, with about two-thirds of that attributable to higher auto prices and one-third to higher interest rates on loans. The company noted in a recent meeting with investors that annual sales of used cars aged 0-6 years have fallen from about 15 million to 12.3 million, down 18%, over the past couple of years. Lately, it appears that sales of late model used cars have begun to improve. If the trend holds, CarMax ought to see much better results.”
A happy customer inspecting a newly purchased used car with the help of a sales assistant.
CarMax, Inc. (NYSE:KMX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held CarMax, Inc. (NYSE:KMX) at the end of the first quarter which was 38 in the previous quarter. The total gross profit of CarMax, Inc. (NYSE:KMX) in the first quarter was $792 million, down 3% year-over-year (see the details here). While we acknowledge the potential of CarMax, Inc. (NYSE:KMX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed CarMax, Inc. (NYSE:KMX) and shared Vulcan Value Partners’ views on the company. Diamond Hill Select Strategy shared in its Q2 investor letter that CarMax, Inc. (NYSE:KMX) stock dropped in the quarter amid market share concerns. In addition, please check out our hedge fund investor letters Q2 2024 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.