America's Car-Mart, Inc. (NASDAQ:CRMT)

CAPS Rating: 5 out of 5

A publicly held automotive retailer in the United States. Its operations are conducted through two operating subsidiaries, America's Car-Mart, Inc and Colonial Auto Finance, Inc.

Recs

1
Player Avatar erditcokaj (< 20) Submitted: 2/1/2011 5:18:45 AM : Outperform Start Price: $25.02 CRMT Score: +12.20

I am compelled by the opportunity for earnings acceleration via the combination of improved lot productivity and more aggressive door growth, as proved by the latest quarter where even on an increasing store count, same store sales had an increase of 8.1%. Over the next 5 years I see potential for EPS to reach $4.00. On my judgment the 10.5 earnings multiple, is unfair, and does not reflect the high profitability of the company,the constantly immpressive exection on the top and bottom line, and mostly the friendly-shareholder board of the company. The company has a long term growth rate of 15%, and putting a market valuation multiple of 16 today rewards investors handsomly. The nature of the business is very attractive as well, in an environment of high unemployment, and strict lending standarts by the banks, the "PAY HERE BUY HERE MODEL" seems the only way to buy a car for a fairly high number of people. Apparrently "Mr Market" thinks that earnings will be on a downward spiral from here forward, in the words of Mr.Peter Lynch; once again ''Mr Market'' seems to overly opptimistic about the future. BUY...

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