Long Position on CARG @ $53.75 on 9/25/2018 (Momentum)

CarGurus, Inc. (CARG) operates an online automotive marketplace connecting buyers and sellers of new and used cars worldwide.

The company's marketplace enables users with third-party validation on pricing, dealer reputation, and other information.

As of June 30, 2017, it had an active dealer network of approximately 40,000 dealers; and approximately 5.4 million car listings.

The disruptive approach that CarGurus took had two central elements. It put the consumer first, ranking auto listings based on value of the deal, not based on which dealerships were paying customers.

Second, it gave dealers a no-lose proposition with a "freemium" model that allows them to list their vehicles and get referrals for no charge. Yet it still makes it advantageous for them to become paying subscribers. 

As a result, the bulk of the nation's 45,000 dealerships list their vehicles with CarGurus, giving it more than 5 million U.S. listings.

Shares have formed a bullish "cup and handle" and are expected to head higher from this formation.

Entry Point: $53.75

Stop Loss: $51.00

52-Weeks Trading Range: $25.85 to $56.17

Target Price: $65.05

Updates

11/14/2018 9:39:05 AM

CARG closed at $42.40

Position closed on 11/14/2018 at price of $42.40 with a -21.12% loss in 50 days.

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