First Pacific Advisors released its third-quarter 2025 investor letter for the “FPA Source Capital,” showing a net asset value gain of 4.59% and 13.76% over the past 12 months. The fund’s top five equity performers added 4.82% to its return, with its bottom five detractors reducing it by 2.03%.

In its third-quarter 2025 investor letter, FPA Source Capital highlighted CarMax, Inc. (NYSE:KMX), a used vehicle retailer. CarMax, Inc. (NYSE:KMX) saw a one-month return of 16.75% and a 55.48% share value loss over 52 weeks, closing at $38.82 per share on December 5, 2025, with a market cap of $5.826 billion.

FPA Source Capital expressed disappointment in CarMax, Inc. (NYSE:KMX) in its third-quarter 2025 investor letter, citing missteps by management leading to a 47% share price decline year-to-date. However, the company’s stock appears inexpensive, trading at roughly 12x forward earnings and 1.1x tangible book value.

CarMax, Inc. (NYSE:KMX) isn’t among the 30 most popular stocks among hedge funds, with 54 funds holding it at the end of the third quarter. The company reported a 6% decline in sales in the fiscal second quarter of 2026 due to lower volume. While CarMax (NYSE:KMX) has potential, certain AI stocks may offer greater upside potential with less downside risk.

Read more at Yahoo Finance: Here’s What Affected CarMax (KMX) in Q3