Newsletter 56: 🚗 Copart - The Billion-Dollar Junkyard Investors Shouldn't Overlook

What’s Copart?
Copart (Ticker: CPRT) isn’t a flashy AI stock or meme-fueled rocketship. It’s a practical, boring, highly profitable business.
Their core business? Salvaged vehicles.

They run one of the world’s largest online marketplaces for accident-damaged, flood-ruined, or repossessed vehicles — helping insurance companies, dealerships, exporters, and scrap yards handle what others see as "junk."

It’s a business built on inevitabilities: cars crash, disasters happen, and insurance companies need solutions fast.

🏗️ How Copart Makes Money

Copart operates a digital auction platform for salvaged vehicles.

Sellers: Insurance companies, rental fleets.
Buyers: Dealers, dismantlers, exporters, scrap yards.
Revenue Model: Fees from both sides + towing, storage, paperwork.

The more disasters, the more cars totaled, the more business Copart does. Strange but true.

📊 Why Investors Love Copart

✅ Dominates the U.S. market with 50%+ share.
✅ Expanding steadily into Europe and emerging markets.
✅ Strong free cash flow, no long-term debt.
✅ Durable "moat" of physical infrastructure + digital network.
✅ Benefits from inevitable cycles (accidents, storms, floods).

🔧 Technical Check (as of July 2025)

Price Range: $58–$65
52-Week High: $68
Trend: Bullish, above 50/200-day moving averages.
RSI: Around 60 — neutral, not overbought.

📈 Potential breakout if earnings impress. Watch for a move above $68.

🚩 Risks to Watch

Fewer accidents as EVs and safer tech reduce collisions.
Competition in Europe from local salvage players.
Valuation remains rich (P/E ~30x), so expectations are high.

🦔 Why Hedgehogs Like It

Copart fits the Hedgehog mindset:
✅ Predictable business.
✅ Hard to disrupt.
✅ Cash machine.
✅ Global expansion ahead.

It’s not about trends. It’s about durability and discipline.

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Through SuperInvestor Club (SIC), I’ve learned how to identify these types of businesses:
➡️ Moats
➡️ Cash flow
➡️ Resilience
➡️ Long-term compounding potential

It’s the same value investing mindset used by the pros.

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Final Thought

Some of the best investments aren’t exciting — they’re necessary.
Copart doesn’t change the world.
It profits quietly from the fact that things break, people crash, and someone has to handle the mess.

📊 A Hedgehog lesson worth remembering:
Durability > Drama.

Stay sharp, stay spiky — be the hedgehog with a strategy
— Mindy
Founder, Hedgehog Huddle

✅ Recent News & Analysis:

Yahoo Finance – Copart Stock Overview
https://finance.yahoo.com/quote/CPRT/