America's Car-Mart (NASDAQ: CRMT) operates
91 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 reported fiscal Q1 EPS of 45 cents and revenues of $75.7 million. Analysts had been looking for 38 cents and $73.8 million. The CEO expressed confidence in the firm's ability to maintain a positive sales trend, noting that Q1 retail unit sales had increased 25.8% (yr/yr) and Q1 same store revenues had risen 28.5% (yr/yr).
CRMT shares
jumped from 30-day/50-day moving average support on the news and then passed into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with three "strong buys" and two "holds". Analysts expect a 15% average annual growth rate, through the next five years. The CRMT P/E ratio (13.86), PEG ratio (0.92), Price to Sales ratio (0.86), Price to Book ratio (1.82), Price to Cash Flow ratio (12.89), Sales Growth rate (28.97%) and EPS Growth rate (150.00%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 82% of the outstanding shares. Over the past 52 weeks, the stock has traded between $9.02 and $23.12. A stop-loss of $19.50 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.
Ray of light: U.S. temp worker hiring increased by 34k in October
Closing Bell: Bulls gutting bears (ATVI, EWBC, GE, JASO, ENZN, MCD)
Goldman Sachs CEO Lloyd Blankfein pulls a Jeff Skilling in an interview
