Episode notes
Daniel Mahncke and Shawn O’Malley revisit Copart (NASDAQ: CPRT), the online salvage auction giant that turns totaled cars into a global marketplace, connecting insurers with more than a million buyers across 190 countries. Copart owns over 250 salvage yards outright — land that’s increasingly difficult to permit today — and compounded earnings per share at over 20% a year for a decade. But the stock is down more than 40% from its highs, U.S. insurance volumes have fallen for four straight quarters, and its main competitor, IAA, has now outgrown Copart for six straight quarters.
Daniel and Shawn dig into what actually broke. Is the volume decline cyclical, driven by Americans dropping insurance coverage after premiums rose ~50% in three years — or structural, as Progressive becomes America’s largest auto insurer while sending three-quarters of its salvage to IAA? They also cover why founder-era CEO Jay Adair returned after four years away, why Copart just bought back $1.6 billion of its own stock after five years of nothing, and what a rumored acquisition of CCC Intelligent Solutions would mean for a company that has never carried meaningful debt. In the end, Daniel updates his valuation model and decides whether Copart earns its way back into The Intrinsic Value Portfolio.
IN THIS EPISODE YOU’LL LEARN:
(00:00:00) Intro
(00:02:29) What changed since our last episode on Copart
(00:14:22) How Copart’s moat works
(00:23:37) Whether Copart’s moat still exists
(00:26:14) Whether competition actually gained market share
(00:45:28) What new CEO Jay Adair wants to change
(01:03:53) How much Copart stock is actually worth
(01:10:29) Whether CPRT will be added to The Intrinsic Value Portfolio
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
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