Car-Mart shares race higher

by The City Wire staff ( 3 views 

Investors of America’s Car-Mart saw their profits mount on Thursday, (Aug. 21) as shares rallied more than 15% to $42.90 on strong volume, nearly seven times the normal shares trading hands.

The Bentonville-based used car dealer reported lighter profits and higher revenue from a year ago on Wednesday (Aug. 20) after the market closed.

That said the results came in 19 cents ahead of Wall Street’s consensus estimate which helped to hoist the shares higher as soon as the market opened Thursday.

Corporate executives said the tactics they are employing to better serve their customers are having a positive impact even in the face of hyper competition among other subprime auto lenders.

Investors were not deterred by comments that indicate some margin squeeze in the short term given the deflationary pressures in average retail sales prices. Car-Mart said longer term, lower prices are good for the customers and allows the company to reduce inventory costs.

Car-Mart shares have traded between $34.56 and $47.93 over the past 52-weeks. Shares are up 2% year-to-date, after Thursday’s rally.