Sachem Head Capital Management LP Makes New Investment in Carvana Co. $CVNA

Key Points

• Sachem Head Capital Management opened a new position in Carvana, buying 625,000 shares valued at about $263.8 million. The stake represents roughly 6.2% of its portfolio and makes Carvana its 7th largest holding.
• Several other institutions also added to or initiated positions in CVNA, while institutional ownership of the stock remains high at 56.71%. Meanwhile, Carvana insiders have been selling shares, including CFO Mark W. Jenkins and COO Benjamin E. Huston.
• Carvana reported strong quarterly results, with EPS of $1.69 versus analyst expectations of $0.32 and revenue of $6.43 billion, beating estimates. Analysts remain broadly positive, with a Moderate Buy consensus and an average price target of $93.14.

Sachem Head Capital Management LP acquired a new position in shares of Carvana Co. (NYSE:CVNA - Free Report) in the 4th quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund acquired 625,000 shares of the company's stock, valued at approximately $263,762,000. Carvana comprises about 6.2% of Sachem Head Capital Management LP's investment portfolio, making the stock its 7th largest holding. Sachem Head Capital Management LP owned approximately 0.29% of Carvana at the end of the most recent reporting period.

Several other large investors have also made changes to their positions in CVNA. Thurston Springer Miller Herd & Titak Inc. acquired a new position in shares of Carvana during the 4th quarter worth about $29,000. Farmers & Merchants Investments Inc. acquired a new position in shares of Carvana during the 4th quarter worth about $29,000. Motiv8 Investments LLC acquired a new position in shares of Carvana during the 4th quarter worth about $33,000. Salomon & Ludwin LLC lifted its position in shares of Carvana by 112.5% during the 4th quarter. Salomon & Ludwin LLC now owns 85 shares of the company's stock worth $37,000 after purchasing an additional 45 shares during the last quarter. Finally, Washington Trust Advisors Inc. acquired a new position in Carvana in the 3rd quarter valued at approximately $38,000. Institutional investors and hedge funds own 56.71% of the company's stock.

Insider Buying and Selling

In other news, CFO Mark W. Jenkins sold 63,750 shares of the stock in a transaction that occurred on Wednesday, April 1st. The stock was sold at an average price of $62.07, for a total value of $3,956,962.50. Following the completion of the transaction, the chief financial officer directly owned 985,445 shares of the company's stock, valued at approximately $61,166,571.15. This represents a 6.08% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, COO Benjamin E. Huston sold 50,000 shares of the stock in a transaction that occurred on Wednesday, April 1st. The stock was sold at an average price of $61.97, for a total value of $3,098,600.00. Following the completion of the transaction, the chief operating officer directly owned 464,620 shares of the company's stock, valued at approximately $28,793,430.64. The trade was a 9.72% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders sold 400,812 shares of company stock valued at $28,039,446. 15.19% of the stock is currently owned by corporate insiders.

Carvana Trading Down 0.0%

Shares of CVNA opened at $64.09 on Monday. Carvana Co. has a 1 year low of $54.46 and a 1 year high of $97.38. The company has a current ratio of 4.09, a quick ratio of 2.57 and a debt-to-equity ratio of 1.05. The stock has a 50 day simple moving average of $71.20 and a 200-day simple moving average of $75.23. The stock has a market cap of $70.30 billion, a PE ratio of 38.98, a PEG ratio of 10.82 and a beta of 3.45.

Carvana (NYSE:CVNA - Get Free Report) last issued its earnings results on Wednesday, April 29th. The company reported $1.69 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.32 by $1.37. Carvana had a return on equity of 41.46% and a net margin of 6.40%.The business had revenue of $6.43 billion during the quarter, compared to analysts' expectations of $6.12 billion. On average, sell-side analysts predict that Carvana Co. will post 1.58 EPS for the current fiscal year.

Analyst Upgrades and Downgrades

Several equities analysts have commented on the company. Argus cut their price target on Carvana from $500.00 to $100.00 in a report on Monday, May 11th. Robert W. Baird set a $88.00 price target on Carvana in a report on Friday, May 15th. Morgan Stanley upped their price target on Carvana from $90.00 to $102.00 and gave the company an "overweight" rating in a report on Thursday, April 30th. BNP Paribas Exane upped their price target on Carvana from $77.60 to $85.80 in a report on Thursday, April 30th. Finally, Needham & Company LLC reaffirmed a "buy" rating and issued a $120.00 price target on shares of Carvana in a report on Friday, June 5th. Two research analysts have rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating and five have assigned a Hold rating to the stock. According to MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average price target of $93.14.

About Carvana

Carvana Co is an online-only retailer of used vehicles that operates a consumer-facing e-commerce platform for buying and selling cars. The company markets and sells inspected, reconditioned pre-owned vehicles through its website, where shoppers can browse inventory, view detailed 360-degree photos and vehicle history reports, finance purchases, and arrange delivery or pickup. Carvana's model is built around a digital end-to-end car buying experience that aims to simplify vehicle transactions compared with traditional dealerships.

Its products and services include direct retail sales of used cars, trade-in and purchase offers for consumer vehicles, vehicle financing and related protection products, and a seven-day return policy that allows customers to test a vehicle in everyday use.

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