On January 22, Courant Investment Management disclosed in a U.S. Securities and Exchange Commission (SEC) filing that it sold out its entire position in CarMax (KMX 1.65%), with the estimated transaction value at $11.11 million.
What happened
According to a SEC filing dated January 22, Courant Investment Management sold its entire stake of 247,520 CarMax shares. The position’s quarter-end value dropped by $11.11 million, reflecting the complete exit from the holding.
What else to know
Top holdings after the filing:
- NYSE:JPM: $26.97 million (24.4% of AUM)
- NYSE:PGR: $26.45 million (23.9% of AUM)
- NYSE:SCHW: $18.33 million (16.6% of AUM)
- NASDAQ:ULTA: $14.02 million (12.7% of AUM)
- NASDAQ:FISV: $12.76 million (11.5% of AUM)
As of January 21, CarMax shares were priced at $48.75, down 38.7% over the past year and vastly underperforming the S&P 500 by 52.3 percentage points.
Company overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $25.94 billion |
| Net Income (TTM) | $457.84 million |
| Price (as of 1/21/26) | $48.75 |
| 1-Year Price Change | (38.68%) |
Company snapshot
CarMax offers a broad selection of used vehicles, including domestic, imported, luxury, hybrid, and electric models, as well as vehicle protection plans and wholesale auction services. The company operates a retail-driven business model with revenue generated through vehicle sales, financing via CarMax Auto Finance and third-party lenders, and ancillary services such as reconditioning and repairs. It targets retail consumers across the United States seeking used vehicles, with a focus on convenience, transparency, and a wide range of financing alternatives.
What this transaction means for investors
Capital rotation tells you more than conviction buys, and this one stands out because it clears space rather than trims risk. Selling out of CarMax entirely signals a view that the recovery path is either too long or too uncertain relative to other opportunities in the portfolio, especially alongside heavy weightings in financials and insurers that benefit more directly from rate normalization.
Recent results help explain the timing. Third-quarter net earnings fell 50% year over year to $62 million, with EPS dropping to $0.43 from $0.81, reflecting softer unit volumes and margin pressure across both retail and wholesale channels. Meanwhile, comparable store used unit sales declined 9%. Even with CarMax Auto Finance income rising 9% to $174.7 million, the core retail engine is doing less of the work it once did.
Management is responding with cost actions, targeting at least $150 million in SG&A reductions by fiscal 2027, and repurchasing $201.6 million of stock last quarter. But those levers take time to show up in earnings, and they do little to offset near-term demand pressure.
