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James Li
James Li
Articles (325)  | Author's Website |

A Deep Look at Copart

Company performed well throughout the year

September 29, 2017 | About:

Copart Inc. (NASDAQ:CPRT), a major provider of vehicle remarketing services around the globe, gained 23.77% year to date according to GuruFocus model portfolios.

The Buffett-Munger model portfolio invested in 404 shares on Jan. 2 as the company made Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio)’s top 25 list. The company’s share price increased from $27.71 to $34.42 since Jan. 2.

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Company reports strong fiscal year results

Copart reported net revenues of $1.4 billion and diluted earnings of 66 cents per share for the 12 months ending July 31, up 14.2% and 49.5% from respective figures from fiscal 2016. The company reported strong growth in service and vehicle sales during the year, driven by increased volume and higher average selling prices. Such revenues, which increased year over year since 2015, contributed to strong company revenue growth. Copart’s three-year revenue growth rate of 11.30% outperforms 73% of global competitors.

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Copart has a profitability rank of 9, with profit margins and returns near a 10-year high and outperforming over 98% of global auto dealerships.

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Company offers good investing potential in the short term

Copart’s Piotroski F-score ranks an excellent 8 out of 9 even though the company’s financial strength ranks a modest 6 out of 10. Not only does Copart have positive asset returns, the company also has increasing asset turnover, gross margins and current ratios year over year.

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New feature note

We now offer the Piotroski F-score details on a company’s summary page. To find this section, first look at the column headed by “Ratios” and scroll down until you see the analyst estimate section. The Piotroski F-score section is right below the analyst estimate section as illustrated in Figure 1.

Figure 1

Copart remains a Buffett-Munger company as the company meets Buffett and Munger’s four investing criteria:

1. Copart’s GuruFocus business predictability rank is a perfect five stars, indicating consistent revenue and earnings growth.

2. Copart has durable competitive advantages based on its strong operating and gross margins.

3. Copart has a debt-equity ratio of 0.58, suggesting its equity growth is higher than its debt growth.

4. Copart’s price-earnings to growth (PEG) ratio is 1.68. While this may be high, it is still reasonable as it is less than 2.

Table 2 details the value screener record as of Sept. 29. Copart is one of 34 Buffett-Munger companies.

Screener Name

USA

Canada

UK / Ireland

Europe

Asia

Oceania

Latin America

Africa

Ben Graham Net-Net

138

71

50

220

492

31

2

8

Undervalued Predictable

51

8

19

62

45

2

20

7

Buffett-Munger

34

7

16

40

70

3

14

2

Historical Low P/S

18

1

7

23

41

0

10

5

Historical Low P/B

23

3

13

41

64

1

13

7

Peter Lynch Growth

25

6

8

7

59

5

12

7

Walter Schloss

18

23

52

40

293

20

14

7

Table 2

​Disclosure:No positions in the stocks mentioned

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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