America’s Car-Mart, Inc.
America’s Car-Mart, Inc. (CRMT) is an automobile retailer with 90 dealerships in eight Southern states. The company’s concept is ‘buy here-pay here.’ Customers can purchase, finance and make payments on a vehicle all the same location.
CRMT, a Zacks #1 Rank (Strong Buy), reported third-quarter earnings on March 4 and surprised by 12%. Profit came in at $3.4 million, or 28 cents per share, compared to breaking even in the year-ago period. Analysts expected 25 cents per share.
Revenue rose 19.9% to $71.1 million compared with $59.3 million in the third-quarter 2007. Same store revenue growth was 18.7%. Retail unit sales increased 17.1% in the quarter.
During the quarter, the company focused on closing under performing dealerships and increasing profitability at existing stores. The strategy appears to be paying off.
‘Retail unit sales were up strongly during the quarter on a store base that was not much larger than a year ago (94 to 90). As we have previously indicated, one of our major goals this year was to increase the profitability of our current stores prior to accelerating our new dealership openings,’ said William H. Henderson, Chief Executive Officer of America’s Car Mart.
CRMT normally sees a sales increase during tax refund season. It expects to see added benefits to sales volumes and collections beginning in May from the Economic Stimulus Plan of 2008.
Over the last nine months, CRMT grew finance receivables by over $19 million, repurchased $2.2 million of stock and reduced debt levels. While the company isn’t immune to the current problems in the credit markets, given its large financing division, its strategy is to continue to increase cash flow.
Brokerage analysts responded by raising estimates on the fourth-quarter and the year. Three out of three covering analysts raised consensus estimates for the fourth quarter in the last 30 days on average of three cents to 29 cents from 26 cents per share. For the year, all three analysts again raised on average of six cents to $1.04 from 98 cents per share.
America’s Car-Mart has a 2008 P/E of 10.35 and a P/B of 1.11. Read the Dec 19, 2007 analysis.
Update to Previous Value Zacks Rank Buy Stocks
Take-Two Interactive Software, Inc. (TTWO) is a video game software publisher best known for the famous franchise, Grand Theft Auto.
Since we last reviewed the company on Nov 16, 2007, it has moved from a Zacks #1 Rank (Strong Buy) to a Zacks #2 Rank (Buy.)
Take-Two has been in the news lately for both its upcoming and highly anticipated launch of Grand Theft Auto IV scheduled for April 29 and for the now hostile tender offer by Electronic Arts, Inc. (ERTS).
Take-Two’s Board initially rejected ERTS’s $2 billion cash offer. Electronic Arts then launched a tender offer directly to the shareholders. ERTS said it would pay $26 for each share of Take-Two, a 64% premium over the stock’s closing price Feb. 19, the day that ERTS made its first offer to the Board.
Take-Two is currently telling shareholders to take no action on the offer while it reviews it. The company said it would advise shareholders within 10 days of the Board’s position on the offer.
TTWO reported its first-quarter earnings on March 11 and reported a wider loss than the prior year. The net loss was $38 million, or 52 cents per share, compared to a loss of $21.6 million, or 30 cents per share, a year earlier. Revenue was $240.4 million, down 13.3% compared to 2007.
However, the company said pre-orders for Grand Theft Auto IV were better than expected. In response to the bullishness about Grand Theft Auto IV, in the last week, three out of six covering analysts raised consensus estimates for the second-quarter by 16 cents to $1.05 from 89 cents per share.
The company has a 2008 P/E of 19.26. Electronic Arts’ tender offer expires on April 11. Read the Nov 16, 2007 analysis.
Last Week’s Value Zacks Rank Buy Stocks
Warner Chilcott Ltd. (WCRX) is a specialty drug company that focuses on two segments: oral contraceptives and dermatology products. It surprised on estimates by 15.38% in the fourth quarter. The company had a ROE of 19.98% in 2007. Read the March 11 analysis.
Hurco Companies, Inc. (HURC) is a global industrial company that produces interactive computer controls, software and computerized machine tools for the metals industry. HURC surprised on estimates three of the last four quarters by 21.05%. The company is an attractive value play, with a P/E of only 10.96. Read the March 12 analysis.
Syniverse Holdings, Inc. (SVR) provides wireless services to telecommunications carriers around the world. The company surprised on fourth-quarter earnings by 13.64%. SVR has a P/E of 13.46. Read the March 13 analysis.
WT Offshore, Inc. (WTI) is an independent exploration and production (EP) company with fields primarily in the Gulf of Mexico. WTI is taking advantage of record crude prices and elevated natural gas prices. The company surprised on fourth-quarter earnings by 17.65% and has surprised for the last four quarters on average of 23.46%. Brokerage analysts forecast 2008 year-over-year growth of 14.16%. Read the March 14 analysis.
Tags: 1 million, Auto, chase, chief executive officer, crude prices, fourth quarter, gas prices, gm, Grand Theft Auto, grand theft auto iv, launch, sales volume, video game
