Buy $KMX cause that's the way it should it be
Key Stats:
P/E Ratio: 18.5 (better than most used cars' depreciation rates)
Free Cash Flow (FCF): 1.4B
Revenue Growth: +3.2% YoY (despite a tough macro environment)
Next Earnings Date: December 19, 2024
Market Cap: 13.01B
Top 3 Technical Reasons:
1️⃣ Ascending Triangle Formation: Price action is coiling around resistance, setting up for a textbook breakout.
2️⃣ MACD Crossover: MACD recently flipped bullish, signalling momentum is shifting to the upside.
3️⃣ Volume Surge: Increased volume on up-days indicates institutional accumulation—smart money loves this trade.
Top 3 Fundamental Reasons:
1️⃣ Easing Interest Rates: Fed's pause on rate hikes bodes well for auto loans, a key driver of CarMax's business model.
2️⃣ Strong Inventory Management: Focused on balancing used car inventories while maintaining robust margins (~10.3% gross margin last quarter).
3️⃣ Consumer Demand Resilience: Used car prices stabilizing, boosting consumer confidence and supporting CarMax's unit sales.
Potential Paths to Profit:
Option 1 (Lowest Risk): Buy and hold shares. Simple and effective.
Option 2 (Options Play): Buy Jan 2025 $100 calls (currently ~$3.50) to leverage the upside with lower capital.
Option 3 (Spread Strategy): Enter a Jan 2025 bull call spread by buying the $95 call and selling the $105 call—maximize your gains while reducing premium costs.
Disclaimer: We are not a brokerage or investment firm. We do not offer financial advice or investment advice and/or signals. This is not certified financial education. We offer access to the daily thought process of an individual and his experiences. We do not offer refunds. All sales are final.
P/E Ratio: 18.5 (better than most used cars' depreciation rates)
Free Cash Flow (FCF): 1.4B
Revenue Growth: +3.2% YoY (despite a tough macro environment)
Next Earnings Date: December 19, 2024
Market Cap: 13.01B
Top 3 Technical Reasons:
1️⃣ Ascending Triangle Formation: Price action is coiling around resistance, setting up for a textbook breakout.
2️⃣ MACD Crossover: MACD recently flipped bullish, signalling momentum is shifting to the upside.
3️⃣ Volume Surge: Increased volume on up-days indicates institutional accumulation—smart money loves this trade.
Top 3 Fundamental Reasons:
1️⃣ Easing Interest Rates: Fed's pause on rate hikes bodes well for auto loans, a key driver of CarMax's business model.
2️⃣ Strong Inventory Management: Focused on balancing used car inventories while maintaining robust margins (~10.3% gross margin last quarter).
3️⃣ Consumer Demand Resilience: Used car prices stabilizing, boosting consumer confidence and supporting CarMax's unit sales.
Potential Paths to Profit:
Option 1 (Lowest Risk): Buy and hold shares. Simple and effective.
Option 2 (Options Play): Buy Jan 2025 $100 calls (currently ~$3.50) to leverage the upside with lower capital.
Option 3 (Spread Strategy): Enter a Jan 2025 bull call spread by buying the $95 call and selling the $105 call—maximize your gains while reducing premium costs.
Disclaimer: We are not a brokerage or investment firm. We do not offer financial advice or investment advice and/or signals. This is not certified financial education. We offer access to the daily thought process of an individual and his experiences. We do not offer refunds. All sales are final.
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