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 $1.03 (2.7%) to $39.41 on average volume. Throughout the day, 1.6 million shares of CarMax exchanged hands as compared to its average daily volume of 1.8 million shares. The stock ranged in a price between $38.39-$39.95 after having opened the day at $38.42 as compared to the previous trading day's close of $38.38. Other companies within the Specialty Retail industry that increased today were: Sport Chalet ( SPCHB), up 7.3%, Barnes & Noble ( BKS), up 5.3%, Mecox Lane ( MCOX), up 5.2%, and Birks & Mayors ( BMJ), up 4.5%.
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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 $8.76 billion and is part of the services sector. The company has a P/E ratio of 21.1, above the S&P 500 P/E ratio of 17.7. Shares are up 2.3% year to date as of the close of trading on Friday. Currently there are nine analysts that rate CarMax a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates CarMax as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

On the negative front, Trans World Entertainment ( TWMC), down 5%, KAR Auction Services ( KAR), down 4.4%, Lentuo International ( LAS), down 4.4%, and Sothebys ( BID), down 2.7%, were all laggards within the specialty retail industry with Netflix ( NFLX) 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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