Post #15 by DTB on the Falling Knives board

Investment Strategies / Falling Knives

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According to Value Line EPS for 2008 were 27' compared to 89' for 2007.
Net profit margin contracted to 0.8% in 2008 compared to 2.2% the previous year.

Thanks. Any company that made positive earnings in 2008 probably deserves to be called 'durable'.

Based on forward looking earnings estimates KMX is currently within it's normal valuation range.
The stock price has plummeted, but so have earnings. On this basis it doesn't seem particularly undervalued.

If they're at a normal valuation range compared to abnormally depressed earnings, that sounds like a deal. The question is, are their earnings down because of supply chains, a dearth of used cars and high interest rates, or is there something permanently wrong with the company? I suspect it's the former, so now may be a good time to be a buyer.

dtb

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