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Pisani: Oppenheimer's Surprising 'Outperform'

Auto dealers and a couple small cap retailers are standouts today.

1) The strong GM March numbers (sales up 43% vs. 27% estimate), combined with a strong earnings report from CarMax , is moving the automotive dealers like Sonic Automotic , Penske Automotive , Lithia Motors ( , a big GM dealer).

2) Big moves in a couple small cap retail today. Talk about back from the dead: Pier One up nearly 10 percent this morning to over $7...it was 50 cents a year ago!

Oppenheimer analyst Brian Nagel traveled with the CFO and released this comment this morning:

"We look upon PIR as one of the most compelling operating-margin expansion stories among leading small-cap hardlines. PIR will report final Q4 (Feb.) results next Thurs. (Apr. 8). The company pre-announced Q4 in early March. Management remains upbeat. Cost controls are holding and it seems that underlying top-line momentum continues to improve. PIR is unlikely to issue specific guidance. We are optimistic that management will soon articulate longer-term financial targets and expect any communication in this regard to spur greater confidence in the PIR story among investors. Our rating on the shares is Outperform."

Also, Borders Group up 42 percent as earnings doubled from a year ago: 1) they are introducing an e-bookstore this spring, 2) they repaid a $42.5 million loan from Pershing Square Capital Management, and 3) they extended their asset-based lending facility.

Here's the problem: unlike many retailers, there is no real topline growth: comp store sales declined by 14 percent at Borders Superstores.

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Symbol
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KMX
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LAD
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PAG
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PIR
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SAH
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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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