Short Thesis on CarMax (KMX)

Harvesters,

Here is an excerpt from our recent analysis of CarMax Inc.: "CarMax is nothing more than a quixotic hallucination from Fed Kool-Aid and is destined to join its predecessor - Circuit City - in the Darwinian Graveyard for the same virus: complacency."

CarMax is essentially a macrocosm of the very cars they sell everyday: an artificial misrepresentation of a fundamentally flawed product. Due to their illogical optimism, the company has became increasingly over-leveraged and will eventually feel the repercussions: downgraded debt, equity dilution, and decreasing EPS. As industry players begin to steal market share, a process that has already began, and the peer-to-peer evolution develops into a main stream product, the complacency virus that plagued its predecessor will begin to take its toll.

Attached below is a copy of our research on CarMax (KMX), please feel free to email us regarding questions and/or additional information.

Thanks again,
Taylor Mann

taylor@pinecapitalpartners.com