CarMax, Inc. (KMX)

LiLNipsFatal (98.90) Submitted: 3/26/2008 4:33:04 PM : Start Price: $19.76 KMX Score: +15.63

Value investors are buying Carmax for several good reasons. For one, they provide a unique car buying experience unlike any other in the industry. Carmax is a "one stop shop" if you will.

There are a couple things that help differentiate Carmax from the field. Carmax has instituted a "no haggle" policy. Salespeople are not paid like traditional car salesmen. There's no incentive for Carmax employees to push profitable cars out the door. Their goal is to help provide the customer with the best car buying experience they can, which leads to repeat business.

Secondly, the used car market is a highly fragmented industry. As Carmax continues to build supercenters across America, their scale should enable them to capture market share from smaller competitors.

Finally, Carmax's management team is excellent. Thomas J. Folliard recently took the reins after Austin Ligon, who was part of the team that conceived CarMax, retired. Folliard has 14 years of experience with CarMax and has held various roles in sales, marketing, and operations before becoming executive vice president of store operations in 2001.

Buy and hold....