There are so many things to say about a used-car dealer, but generally none of them are as flattering as "Watch your back!" Still, rising new-car prices have sparked a genuine need for affordably priced older vehicles. You can make the analogy with animal shelters -- most people might want to adopt a puppy (read, new car), but they're probably better off with an older, more established dog.

Companies in the used-car industry, such as AutoNation (NYSE:AN) and CarMax (NYSE:KMX), have recently seen profit outlooks twisted by the rash of hurricanes and tropical storms that pounded Florida and Southeast coastlines. However, top dog America's Car-Mart (NASDAQ:CRMT) continues to flourish in the "Buy Here/Pay Here" segment of the used-car market, with locations in Arkansas, Oklahoma, Missouri, Kentucky, and Texas.

The positive tone of America's Car-Mart's first-quarter earnings release seemed to dwarf the recent difficulties of other companies in the industry. Earnings of $0.62 per share outpaced the $0.59 analysts' consensus estimate and the $0.55 it earned last year. The company's average retail sales price vaulted to about $7,000, which was well ahead of last year's $6,400 range. Additionally, the company plans to leverage this success by opening another eight dealerships in fiscal 2005, primarily in Texas, Oklahoma, and Missouri, to build on the 73 dealerships it currently operates.

Many of the people that buy cars from America's Car-Mart have credit histories that would be red-flagged at most new-car dealers. In response to this risk, the company adopted tighter delinquency standards in February that have obviously paid off. At the end of the first quarter, the percentage of past due accounts was 3.4%, which was a tremendous improvement over the 4.8% of accounts past due last year.

Looking ahead, the company expects second-quarter earnings to be in the range of $0.53 to $0.56 per share (analysts expect $0.55 per share) and full-year fiscal 2005 earnings in the range of $2.27 to $2.36 per share. These steady numbers expect to build on the 11% EPS growth of the first quarter that was sparked by a 17% revenue increase.

America's Car-Mart is a company that has made a strong effort to pay down debt and reinvest cash back into its growing business. Demographics have played a large part in the company's success and its competitors' recent weather-related difficulties. The shares, which are trading at only 14 times this year's earnings estimate of $2.32 per share, appear to be quite attractive relative to the company's projected 18% earnings growth rate.

Cruise over to these used-car company Takes:

Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.