Earlier this month, we discussed taking profit on our CAR position on valuation grounds. The math is simple: we like the business, but it’s become increasingly expensive as it roars through $40. Digital auto marketplace CAR is one tech stock that was flagged by some analysts as likely to be a ”loser” under a Trump administration, but new highs over the last 5-weeks would counter their concerns. When the momentum sellers decide to abandon ship, this is one name that could pullback ~15% in the blink of an eye, but similarly, if we see another “Santa Rally” due to a dearth of sellers, this volatile name could test $45 before we carve our Christmas turkey. For now, momentum is strong, and it’s paid dividends to back momentum this year.
- We will likely consider taking profits on our position when we de-risk the portfolio, &/or reduce our tech exposure, but we remain cautiously bullish into Christmas.
MM is long & cautiously bullish CAR
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