Why CarMax Will Keep Zooming

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, used-vehicle retailer CarMax has earned a respected four-star ranking.

With that in mind, let's take a closer look at CarMax and see what CAPS investors are saying about the stock right now.

CarMax facts

Headquarters (Founded)

Richmond, Va. (1993)

Market Cap

$10.8 billion


Automotive retail

Trailing-12-Month Revenue

$11.8 billion


CEO Thomas Folliard (since 2006)
CFO Thomas Reedy (since 2010)

Return on Equity (Average, Past 3 Years)



$725.3 million / $6.7 billion


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 91% of the 1,041 members who have rated CarMax believe the stock will outperform the S&P 500 going forward.   

Earlier this week, one of those Fools, TMFTailwind, succinctly summed up the CarMax bull case for our community:

This big-box retailer of used cars is the market leader in a very fragmented industry, currently commanding only about a 3% market share. KMX clearly differentiates itself from its competitors (think stereotypical used-car salesmen) with its no-haggle, low-pressure sales approach and nationwide network of stores and available cars. I believe KMX has a tremendous opportunity to continue to build new stores in underserved markets and thus capture incremental market share. Scale, customer satisfaction, and value proposition are all reasons why KMX has a good chance at achieving market-beating returns.  

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, CarMax may not be your top choice.

With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!

The article Why CarMax Will Keep Zooming originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends CarMax. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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