Major Institution Abandons CarMax Amid 56% Decline

The machinery of finance, in its relentless and inscrutable motion, witnessed a peculiar adjustment in the holdings of Diamond Hill Capital Management. For the quarter ending September 30, 2025, the fund recorded a reduction of $251.04 million in its stake of CarMax (KMX 22.78%), a withdrawal of 2,128,619 shares that seemed less a decision and more an inevitability, as if the numbers themselves had conspired to dictate this course.

What Happened

The Securities and Exchange Commission, that arbiter of silent decrees, bore witness to the sale of 2,128,619 CarMax shares by Diamond Hill Capital Management during the quarter. The fund’s position, once a significant portion of its portfolio, now stands diminished, its value reduced by $251.04 million since June 30, 2025. The remaining 4,833,319 shares, valued at $216.87 million at quarter-end, appear as relics of a former order, their worth measured not in purpose but in the cold arithmetic of market forces.

What Else to Know

This act of divestment, though seemingly straightforward, left CarMax occupying a precarious position within the fund’s 13F reportable assets. At 1.03% of the total, it was neither a titan nor a footnote, but a fragment of a larger, incomprehensible whole. The top holdings, those titans of the financial cosmos, loomed in stark contrast: AIG, BRK-B, ABT, CL, TXN-each a monolith of stability, their values etched in the language of certainty.

As of November 4, 2025, CarMax’s shares, priced at $40.75, bore the weight of a year’s decline, their descent a slow, inexorable slide. The S&P 500, that paragon of market orthodoxy, had turned its gaze elsewhere, leaving CarMax to wander the periphery, its presence a question mark in the ledger of indices.

Company Overview

Metric	Value
Price (as of market close 2025-11-04)	$40.75
Market Capitalization	$6.22 billion
Revenue (TTM)	$27.79 billion
Net Income (TTM)	$521.07 million

Company Snapshot

CarMax, that sprawling entity of secondhand vehicles, operates within a framework as labyrinthine as it is opaque. Its wares-domestic, imported, luxury, hybrid, electric-flow through a system of reconditioning and financing, each step a ritual performed with mechanical precision. Its business model, a confluence of retail and auction, seems to thrive on the illusion of choice, while its customers, unwitting participants in this grand mechanism, navigate a terrain of uncertainty.

Foolish take

Diamond Hill Capital Management’s withdrawal of more than $250 million from CarMax was not merely a transaction but a pronouncement, a quiet acknowledgment of the company’s faltering grip on relevance. The year-to-date decline of 56% is not a mere statistic but a narrative of erosion, each factor a thread in the unraveling tapestry: the impending departure of CEO Bill Nash, the pre-announced shortfall in earnings, the analysts’ retreat. The removal from the S&P 500, a bureaucratic decree, only deepened the sense of exile.

For the retail investor, this serves as a grim reminder: the market’s favor is fickle, its thresholds rigid. To be cast out is not a failure of merit but a consequence of the system’s unyielding logic. And so, the cycle continues, an endless march through the corridors of finance, where every decision is both inevitable and absurd.

Glossary

13F reportable assets: The quarterly confessions of institutional souls, detailing their holdings in a language of numbers and omissions.
Assets under management (AUM): The aggregate weight of capital entrusted to a fund, a measure of influence and responsibility.
Position: A fragment of ownership, a tether to a company’s fate, yet meaningless in the face of broader forces.
Stake: A claim upon a company’s future, rendered fragile by the whims of the market.
Top holdings: The dominant forces within a portfolio, each a beacon of stability in a sea of uncertainty.
Quarter (Q3 2025): A period marked by reports and expectations, a cycle of anticipation and disillusionment.
Wholesale auctions: The silent auctions of vehicles, where value is determined by unseen hands.
Reconditioning services: The art of restoring used vehicles, a process as meticulous as it is futile.
Multi-channel sales approach: A strategy of dissemination, yet each channel a dead end.
Integrated financing solutions: The seamless integration of loans and purchases, a transactional dance without resolution.
Fund: A vessel for capital, its purpose dictated by the rules of its managers.
TTM: The 12-month horizon, a fleeting measure in the eternal present.

‍🚶♂️

2025-11-06 23:03