Carvana (CVNA) and Cargurus (CARG) Are Aggressive Growth Stocks
Brian Bolan is the Aggressive Growth Stocks Strategist for Zacks Investment Research and he is driven to tell you about growth stocks. Today he has two car related stocks to talk about.
First is Cargurus CARG which carries the best Zacks Rank. As a Zacks Rank #1 (Strong Buy) this stock is seeing positive earnings estimate revisions.
Brian goes through the recent numbers for Cargurus CARG and talks about the basic need for cars in the economy. He also touches on the idea of the price increases for used cars during the pandemic and how they have recently fallen.
The next stock, Carvana CVNA is an interesting idea here as it is a Zacks Rank #2 (Buy) and the stock is really moving of late. Brian runs through the numbers first before telling us why the stock is moving so much.
The telling slide is the price chart going back a few years showing Carvana CVNA trading at $350 a share! The stock tumbled down like a “black diamond” ski slope and along the way, the shorts have pressed their bets.
More recently the stock is moving higher in a short squeeze, something like what we saw in Gamestop GME and AMC Theaters AMC a few years back.
The question is how long with the gamma squeeze continue on this stock and can it get its financial house in order. If it does that, then the squeeze will only continue. With 49% of the float sold short, this squeeze could have more legs, but as Brian points out, it will only run as long as the buyer buy more and the shorts continue to cover… and that has a odd way of stopping … and also has some dramatic consequences.
This is a stock that investors should be very cautious about as the big power players have a way of making it look like a great idea, until it isn’t.
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Carvana Co. (CVNA) : Free Stock Analysis Report
CarGurus, Inc. (CARG) : Free Stock Analysis Report
