CarMax Story

<div class='circular--portrait' style='background:#006400;color: #F5FFFA;font-size:3em;'>KMX</div>
KMX -- USA Stock  

USD 129.19  0.43  0.33%

It appears CarMax may not recover as fast as we have hopped for as its price went down 2.33% today. This firm current daily volatility is 2.39 percent, with a beta of 1.55 and an alpha of 0.37 over DOW. As many of us are getting excited about current market fluctuations it is important to break down CarMax based on its technical indicators. Why are we still confident in our projection for a recovery.
Published over two weeks ago
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Should you take up CarMax Inc after the current volatility rise?
CarMax Inc has roughly 236.64 M in cash with 749.69 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.46.
Macroaxis provides advice on CarMax Inc to complement and cross-verify current analyst consensus on CarMax Inc. Our investment recommendation engine determines the company's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
Investing in CarMax, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding CarMax along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of CarMax's stock price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of CarMax in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as CarMax. Your research has to be compared to or analyzed against CarMax's peers to derive any actionable benefits. When done correctly, CarMax's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in CarMax Inc.

How important is CarMax's Liquidity

CarMax financial leverage refers to using borrowed capital as a funding source to finance CarMax Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. CarMax financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between CarMax's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for CarMax, but it might be worth checking our own buy vs. sell analysis

CarMax Correlation with Peers

Investors in CarMax can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in CarMax Inc. Diversification will allow for the same portfolio return with reduced risk. The correlation table of CarMax and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities CarMax is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage.
Please check volatility of CarMax for more details

Exercise or conversion by Thomas Folliard of 185120 shares of CarMax subject to Rule 16b-3

Legal trades by CarMax insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
CarMax insider trading alert for exercise of stock options (right to buy) by Thomas Folliard, the corporate stakeholder, on 14th of April 2021. This event was filed by Carmax Inc with SEC on 2021-04-14. Statement of changes in beneficial ownership - SEC Form 4. Thomas Folliard currently serves as non-executive chairman of the board of CarMax Inc [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down

CarMax appears to be very steady, given 1 month investment horizon. CarMax Inc secures Sharpe Ratio (or Efficiency) of 0.25, which signifies that the company had 0.25% of return per unit of risk over the last month. Our standpoint towards foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. By analyzing CarMax Inc technical indicators you can presently evaluate if the expected return of 0.6% is justified by implied risk. Please makes use of CarMax Inc Risk Adjusted Performance of 0.2122, downside deviation of 1.79, and Mean Deviation of 1.72 to double-check if our risk estimates are consistent with your expectations.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Will CarMax price slide impact its balance sheet?

Current coefficient of variation is at 407.05. CarMax Inc has relatively low volatility with skewness of 0.98 and kurtosis of 2.37. However, we advise all investors to independently investigate CarMax Inc to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure CarMax's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact CarMax's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Conclusion on CarMax

While few other entities within the auto & truck dealerships industry are still a little expensive, even after the recent corrections, CarMax may offer a potential longer-term growth to investors. While some in two-three weeks oriented investors may not share our view, we believe it may not be a good time to trade new shares of CarMax.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of CarMax Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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