America’s Car-Mart (CRMT)

Jan 9, 2023Trade Ideas

Rising interest rates battered used-car dealer stocks in 2022. That’s because your car loan will become even more expensive as that happens. However, it appears used-car stocks may have dropped too far, too fast, with some insiders starting to buy their beaten-down stocks.

Look at America’s Car-Mart (CRMT), for example. Starting 2022 around $100, the CRMT stock now trades at $72.68, oversold. It’s also at 0.35x sales, and 0.90x book at the moment. Helping, one of the company’s biggest investors just spent $5.2 million on the stock.

According to Barron’s, “Adam Peterson paid $5.2 million in transactions from Dec. 21 through Dec. 28 for a total of 75,500 America’s Car-Mart shares, an average price of $68.78 each. Peterson made the purchases through Magnolia Group LLC, which now owns 725,500 America’s Car-Mart shares. Magnolia, of which Peterson is general partner and investment manager, is America’s Car-Mart’s second-largest investor, according to S&P Capital IQ. Peterson is also co-CEO and co-chairperson of Boston Omaha (BOC).”

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