The text discusses the investment thesis for KAR Auction Services (KAR), highlighting the potential for significant value and upside in the stock. The writer believes that KAR is a good business available at an attractive price due to perceived risks in the auto supply chain. They see the pending spin and management’s commitment to the company as short-term catalysts for unlocking value. Additionally, the acquisition of TradeRev is seen as a major opportunity that is currently undervalued by the market. The writer suggests that KAR has the potential for margin expansion and that the market is assigning a negative value to TradeRev, which could provide further upside. Overall, they see a clear path for the stock to double in value within three years with minimal downside risk.
It’s important to note that these are the views and opinions of the writer and not guarantees of future performance. Investors should conduct their own research and consider their own risk tolerance before making any investment decisions.
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