CarMax Inc. (KMX): Today's Featured Specialty Retail Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

CarMax ( KMX) pushed the Specialty Retail industry higher today making it today's featured specialty retail winner. The industry as a whole closed the day up 0.7%. By the end of trading, CarMax rose 52 cents (1.6%) to $32.73 on average volume. Throughout the day, 1.9 million shares of CarMax exchanged hands as compared to its average daily volume of two million shares. The stock ranged in a price between $32.23-$32.77 after having opened the day at $32.23 as compared to the previous trading day's close of $32.21. Other companies within the Specialty Retail industry that increased today were: Office Depot ( ODP), up 21.2%, Lentuo International ( LAS), up 14.6%, iParty Corporation ( IPT), up 5.2%, and Francescas Holdings ( FRAN), up 4.4%.
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CarMax, Inc., through its subsidiaries, operates as a retailer of used vehicles in the United States. It also sells vehicles that do not meet its retail standards to licensed dealers through on-site wholesale auctions, as well as sells new vehicles under franchise agreements. CarMax has a market cap of $7.36 billion and is part of the services sector. The company has a P/E ratio of 18.2, equal to the average specialty retail industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Shares are up 5.7% year to date as of the close of trading on Tuesday. Currently there are nine analysts that rate CarMax a buy, no analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates CarMax as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

On the negative front, PC Mall ( MALL), down 4.4%, Finish Line ( FINL), down 4.3%, Coinstar ( CSTR), down 4.2%, and Rush ( RUSHA), down 2.7%, were all laggards within the specialty retail industry with PetSmart ( PETM) being today's specialty retail industry laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the specialty retail industry could consider SPDR S&P Retail ETF ( XRT) while those bearish on the specialty retail industry could consider ProShares Ultra Sht Consumer Goods ( SZK).

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