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| | | Wednesday, July 27, 2016 | Issue #2854 | |
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All 50 States (and Three Territories Too)
Wisconsin... $5.7 million since June 20.
Pennsylvania... $136 million last year.
Ohio... $1 billion-plus so far.
New York... $13.3 billion total.
States across America (and three territories) are sending out $62 billion to 117 million people. Why? And are you due for a check? Find details here. | |
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This Stock Is on the Road to Riches Sean Brodrick, Resource Strategist, The Oxford Club
 Consumer spending has shifted into high gear.
According to data from the Federal Reserve Bank of Atlanta, personal consumption expenditures will rise an annualized 4.5% in the second quarter. That's the highest amount of growth since the first quarter of 2006.
Naturally, everyone is trying to figure out how to grab a slice of the consumer pie. I have an opportunity for you today that seems to have slipped past Wall Street's radar.
Rising incomes and an improving job market are a 1-2 combo that has drastically boosted consumer spending. Let me add a third force to the mix: Cheap gas.
The U.S. spent $991 million per day on petroleum products last year. That's the lowest daily total since 2008. But it doesn't mean we're driving less. Just the opposite, in fact...
According to the Federal Highway Administration, travel on all roads and streets is up an average 2% from 2015.
By year's end, the EIA says motor gasoline consumption will rise 1.5%, or 130,000 barrels per day, to hit 9.29 million bpd. If so, it will be the greatest annual amount of gasoline consumed on record.
So Americans are clearly driving more, wearing out their cars. And that, combined with a bevy of disposable income, is sending car sales through the roof.
[Editor's Note: Our Research Analyst Brian Kehm covered the dark side of this trend - the rise in subprime auto loans - here. If you're thinking about pulling the trigger on a new Mustang, you may want to read his comments first.]
So far this year, total vehicle sales are on track to hit about 17.6 million, according to Autodata. That would surpass last year's record peak of 17.4 million cars sold in the U.S.
Looking forward, annual auto sales should hit 20 million by 2018.
This trend is certainly reflected in the performance of the big automakers. General Motors (NYSE: GM) and Ford (NYSE: F) are 37% and 40% off their lows, respectively. And with those stocks breaking out, I don't blame anyone for buying them. But there's a better deal over in the "used" section of the lot...
I'm talking about CarMax (NYSE: KMX).
It's the biggest used car dealer in the country and the only one with a national brand. It has 162 locations and plans to open 17 more stores within the next year. Some Wall Street analysts even say CarMax could eventually double its number of stores.
That's important because CarMax has low growth in its same-store sales. For now. The surge in new car sales is dragging on used car sales. But what goes around comes around...
CarMax's sales cycle comes after the big, new-car sales. So if you want to invest with an eye beyond 2018, CarMax could be the ride you're looking for.
That's because CarMax offers no-haggle pricing on products that have been rigorously reconditioned and certified. Back when I was younger, it offered a night-and-day difference when compared to a regular car dealer.
(But that was when I was young, handsome, and bad at making deals. Now I'm older, I have a fatter wallet, and I haggle like a demon bargaining for a soul. Car salesmen get indigestion when I walk on the lot...)
CarMax is aimed at people who want good, reliable used cars at a fair price. And while it has an internet presence, there's still plenty of growth potential in that area. The company is just starting to offer online financing to customers. That should help drive profits.
Another perk for investors? CarMax does stock buybacks. During the first quarter, the company spent $132 million to repurchase 2.6 million shares. As of May 31, it had $1.27 billion of authorization remaining under its share repurchase program.
Share buybacks always provide a "floor" for stocks. But right now, CarMax doesn't need to worry about the floor...
It's too busy driving through the ceiling.
As you can see, CarMax just broke through overhead resistance. Normally when this happens, you'd expect the stock to tap the brakes. But CarMax has kept its foot on the accelerator and is aiming straight for the next level of resistance at $59.
This stock is on the road to $80 a share - maybe higher.
Good investing,
Sean
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Abandoning the U.S.A. Like Rats On a Sinking Ship
 There's a growing trend worldwide to "strike back" at the United States for some of our economic practices.
In fact, there's already a list of 25 countries agreeing to take "revenge" on the USA. They think our best days are behind us... and they're abandoning ship as fast as they can. You might not believe it, but Canada, Britain and Qatar are on that list!
And if you think our "friends" turning their backs on us is bad news... you won't believe what our enemies are up to. Click here (or on the photo) to discover the worst "Rat King" of all. | |
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In today's edition of Investment U Plus, readers are discovering another hidden gem from Sean. It's an energy play with an outstanding balance sheet and a sizable dividend. To find out how you can get all the details, click here. | |
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In the wilderness, the wrong response could cost you your life. In the markets, the same is true. Here's how to protect yourself in both realms. Read On... | |
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This time in 2015, energy stocks were in free fall. But the sector is fast regaining those losses - and there are plenty of bargains to be found. Read On... | |
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The Oxford Club is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that although our track record is highly rated by an independent analysis and has been legally reviewed, investment markets have inherent risks and there can be no guarantee of future profits. The stated returns may also include option trades. 
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