In short: Offered "for illustrative use" as a holding whose cheapness is an artifact of the ETF era: per-share earnings compounded 13.7% a year since 2000 yet the stock trades at 11x net income, and it has repurchased 58% of its shares out of free cash flow in the past five years — shrinking exactly the trading liquidity index organizers require. A $7 billion market value puts it below the S&P's smallest constituents.
AutoNation is a car-dealership chain — not a business anyone associates with compounding. But it has grown earnings per share 13.7% a year since 2000 and trades at eleven times earnings, largely because it has spent its cash buying back 58% of its own shares in five years.
Horizon Kinetics uses it to make a structural argument rather than a stock pitch. Index funds need companies big enough and heavily traded enough to absorb billions of dollars. A company that keeps retiring its own shares is shrinking exactly the thing index providers require, and at $7 billion it is already smaller than the smallest S&P 500 members. So the money that mechanically flows into index constituents never reaches it, fewer analysts cover it, and the multiple stays low no matter how good the per-share arithmetic is. The firm's phrase for this is the "ETF Divide" — and it is where they expect to find the free lunch.
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