Stocks On My Screen For Week Starting February 15th, 2021

Every week, our model comes up with 40 stocks, 20 positive and 20 negatives, to watch for next week’s trading. The model is based on a mix of fundamental and quantitative factors, built on my proprietary database of detailed earnings model on more than 1375 U.S. listed companies. The historical data for these earnings models is sourced from SEC filings. Performance of last week’s model portfolio for the week was, Net: 4.1% Longs: 3.9% Shorts:  0.2% Assuming 5% is dedicated to each position, resulting in 0% net exposure and no…

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Yes, CarMax Can Catch Up

There is growing concern among investors that CarMax Inc. (NYSE: KMX) will get left behind, due to its old business model, in an industry that is fast getting digitized, a process that has picked pace after the pandemic. Yes, the stock may have recovered most of the ground lost after March, when the used vehicle sales collapsed, but the stock continues to trade at a significant discount, based on most traditional valuation metrics, to peers that have higher exposure to online sales.   Next Yr. PE P/ Sales Market Cap…

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CarGurus Doesn’t Deserve A Premium Anymore

CarGurus Inc. (Nasdaq: CARG) is trading at an elevated premium, especially compared to other players in the online used vehicle sales industry, but the fundamentals suggest this premium is unwarranted given the business seems to be losing the edge to its peers. No matter whether one is a growth investor or value, other stocks in the space offer better risk-reward tradeoffs.   Next Yr. PE P/ Sales Market Cap (M) Gross margins Last FY Sales Growth Next Yr. CarGurus Inc.  46.8  5.2  $3,150 94% 26% Carvana Co.  Loss  5.2  $27,170…

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