Disrupting the Industry and Its Own Business

CarMax Inc. (NYSE:KMX), the largest retailer of used cars in the United States, is now in the second year of its omnichannel strategy, “omnichannel” referring to the integration of online and traditional retailing.

If well executed, the strategy promises a seamless integration between the online experience and the brick-and-mortar experience for customers. For example, consumer product retailers such as Costco (NASDAQ:COST) and Walmart (NYSE:WMT) allow customers to order online and pick up their orders at the nearest brick-and-mortar location.

According to its latest 10-K, the strategy allows customers to shop its inventory of more than 80,000 vehicles at its 216 local stores. If a customer expresses an interest, the vehicle can be transferred to the nearest store or even to the customer’s door, for a test drive.

There are several elements in the business model that support omnichannel:

  • It has customer experience reps who help online customers through the buying
Read More

How Does LPL Financial Holdings’s (NASDAQ:LPLA) P/E Compare To Its Industry, After Its Big Share Price Gain?

Those holding LPL Financial Holdings (NASDAQ:LPLA) shares must be pleased that the share price has rebounded 32% in the last thirty days. But unfortunately, the stock is still down by 28% over a quarter. But shareholders may not all be feeling jubilant, since the share price is still down 20% in the last year.

Assuming no other changes, a sharply higher share price makes a stock less attractive to potential buyers. In the long term, share prices tend to follow earnings per share, but in the short term prices bounce around in response to short term factors (which are not always obvious). So some would prefer to hold off buying when there is a lot of optimism towards a stock. Perhaps the simplest way to get a read on investors’ expectations of a business is to look at its Price to Earnings Ratio (PE Ratio). Investors have optimistic

Read More