Who said the auto industry is down and out?
America's Car-Mart, Inc. (CRMT: 24.16 0.00 0.00%), which operates 97 automotive dealerships in 8 states and also has a successful car financing slogan "Buy Here/Pay Here", on Jun 3 reported record full year earnings.
When I last reviewed America's Car-Mart in September 2009, the company was, even then, seeing sales growth of 10% as consumers turned to the company's attractively priced autos and easy financing.
Since then, the company has surprised on estimates 3 quarters in a row, including on Jun 3 for the fiscal fourth quarter.
Earnings per share for the fiscal fourth quarter were 62 cents per share compared to 43 cents in the year ago quarter. The Zacks Consensus was calling for 58 cents.
Revenue continued to rebound, growing 14% to $88.8 million from $77.9 million a year ago. Same store sales rose 11.8%.
Customer Credit Is Starting to Turnaround
The financing arm is also improving. The provision for credit losses fell to 19.3% of sales versus 20.8% a year ago. Accounts 30 days past due improved a tad to 2.7% from 2.8% as of Apr 30, 2009.
Net charge-offs also decreased while down payments increased 9.2% from 8.6% in the fourth quarter of 2009.
Share Repurchases
America's Car-Mart has been repurchasing shares. Since Feb 1, 2010, it has repurchased 4.1% of its common stock.
The Board has recently authorized another repurchase program up to 1 million shares.
Zacks Consensus Estimates Rise
4 estimates out of 5 have moved higher for fiscal 2011 over the last 30 days. The Zacks Consensus has risen by 5 cents to $2.62 per share in that time.
Earnings are expected to grow by 16% over last year.
Is It Still a Value Stock?
America's Car-Mart has gotten cheaper since I last reviewed it in 2009. Back then, it was trading at 12.7x forward earnings. Now it is trading at just 9x.
The company also still has an attractive price-to-book ratio of 1.6 which is well within the parameters of a "value" stock.
America's Car-Mart is now a Zacks #2 Rank (buy) stock.
Read the Sep 11, 2009 article.
Update to Previous Value Zacks Rank Buy Stocks
Jo-Ann Stores, Inc. (JAS: 39.64 0.00 0.00%) has surprised on the Zacks Consensus 5 quarters in a row, which is impressive as that time period covered the darkest time of the retail recession. Read the full article.
Harbin Electric Inc. (HRBN: 17.06 0.00 0.00%) is a dirt cheap Chinese stock. The company is trading at just 6.6x forward earnings, well under its industry average of 14. Read the full article.
DXP Enterprises Inc. (DXPE: 15.80 0.00 0.00%) is seeing its markets begin to improve as the global economy recovers. Analysts are bullish and expect earnings growth of 45.9% in 2010. Read the full article.
Men's Wearhouse Inc. (MW: 19.56 0.00 0.00%) has put together a nice string of earnings surprises, beating each of the last 4 quarters by 35.8%. But are the retailer stocks weakening here? Read the full article.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
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