Here’s Why Madison Mid Cap Fund Trimmed CarMax (KMX)
Madison Investments, an investment advisor, released its “Madison Mid Cap Fund” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund (Class Y) returned 7.17% compared to the 9.21% increase for the Russell Midcap Index. The Fund returned 12.44%, in the year-to-date nine months, compared to 14.63% for the index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Madison Mid Cap Fund highlighted stocks like CarMax, Inc. (NYSE:KMX) in the third quarter 2024 investor letter. CarMax, Inc. (NYSE:KMX) is a used vehicle retailer headquartered in Richmond, Virginia. The one-month return of CarMax, Inc. (NYSE:KMX) was -1.29%, and its shares gained 19.54% of their value over the last 52 weeks. On October 17, 2024, CarMax, Inc. (NYSE:KMX) stock closed at $75.12 per share with a market capitalization of $11.638 billion.
Madison Mid Cap Fund stated the following regarding CarMax, Inc. (NYSE:KMX) in its Q3 2024 investor letter:
"We trimmed our positions in Moelis and CarMax. We reduced our position in CarMax, Inc. (NYSE:KMX) coincident with our addition of the two automotive retailers. While we are positive on CarMax’s prospects, we want to ensure we manage our portfolio’s overall exposure to the new and used car markets."
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, 35 hedge fund portfolios held CarMax, Inc. (NYSE:KMX) at the end of the second quarter which was 42 in the previous quarter. In the second quarter of fiscal year 2025, the company reported total sales of $7 billion, down 1% year-over-year. 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 the list of stocks with the highest consensus return on equity (ROE) according to Goldman Sachs. In addition, please check out our hedge fund investor letters Q3 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.