With $11 billion in sales, CarMax, Inc. (CXM
) is the nation's largest retailer of used cars. The company's shares rose after it demonstrated positive momentum in its sales and earnings growth. We believe that several positive factors should set the stage for continued good results in 2013. These include a significantly improved supply of late model cars entering the used car market, which should drive better prices and sales volume; accelerating same store sales as more recently-opened stores enter the sales base; and, pent-up demand for used cars among drivers, resulting from an the high average age of cars currently on the road.
From Baron Funds' fourth quarter letter.