America's Car-Mart (NASDAQ: CRMT) operates 94 automotive dealerships, located primarily in the smaller urban markets of eight South-Central states. The dealerships focus on selling and providing the financing for basic, affordable cars, trucks and sport utility vehicles. Competitors include AutoNation (NYSE: AN) and CarMax (NYSE: KMX).

The company pleased investors last week, when it announced that closing underperforming branches and beefing up advertising initiatives generated fiscal Q3 EPS of 28 cents and revenues of $71.1 million. Wall Street analysts had been looking for 27 cents and $67.2 million. Looking ahead, the Jeffries analyst noted that the firm is able to internally fund its growth and is therefore not much impacted by the current credit crunch. Being focused on the used car market, the company was expected to be a relative outperformer in the current economic environment.

The stock popped through major moving average resistance on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with one "strong buy", two "buys" and two "holds". Analysts expect a 15% growth rate, through the next year. The CRMT P/E ratio (13.37), PEG ratio (0.89), Price to Sales ratio (0.56), Price to Book ratio (1.10), Price to Cash Flow ratio (11.95), Sales Growth rate (19.95) and EPS Growth rate (0.00 to 0.28 yr/yr) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 69% of the outstanding shares. Over the past 52 weeks, the stock has traded between $9.02 and $14.20. A stop-loss of $10.45 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.