06. Copart, Inc. (NASDAQ:CPRT)
Number of Hedge Fund Holders: 50
Copart, Inc. (NASDAQ:CPRT) is a leading provider of online vehicle auctions and remarketing services across multiple regions, including the United States, Canada, and the United Kingdom. As a company deeply integrated in the insurance and vehicle salvage industry, Copart, Inc. (NASDAQ:CPRT) is well-positioned to benefit from the rising frequency of natural disasters and hurricanes, which often lead to higher total loss vehicle rates. This makes the stock a strategic addition to a list of hurricane and natural disaster-related stocks.
The company’s wide range of services, such as vehicle inspections, transportation, title processing, and salvage estimation, are indispensable for insurance companies when processing claims for vehicles damaged due to natural disasters. Copart’s Title Express service, which streamlines the title procurement process for insurers, has gained significant traction, demonstrating its critical role in the insurance ecosystem. During the fourth fiscal quarter of 2024, Copart reported a 6% year-over-year increase in insurance vehicle volumes and a 20.4% increase in non-insurance volume growth, highlighting the company’s ability to grow across various segments.
Although Copart, Inc. (NASDAQ:CPRT) missed its earnings expectations in the recent quarter—reporting earnings per share (EPS) of $0.33 against estimates of $0.36—the company’s fundamentals remain robust. Copart’s total revenue for fiscal 2024 was $4.2 billion, representing a 10% year-over-year growth. The company’s international business also saw substantial expansion, with unit growth of 17% for Q4 and 21% for the full year. Meanwhile, U.S. service revenue increased by 10% for the year, supported by strong growth in both insurance and non-insurance units.
Additionally, Copart, Inc. (NASDAQ:CPRT) has become a popular choice among institutional investors, with hedge fund interest in the stock increasing to 50 holders in Q2 2024, up from 41 in the previous quarter. This reflects growing investor confidence in the company’s long-term potential. The expansion of its real estate portfolio and strategic partnerships, such as its collaboration with Purple Wave, also position Copart to continue capitalizing on industry trends and natural disaster-related surges in vehicle volumes. Overall, Copart, Inc. (NASDAQ:CPRT) ability to provide critical services to the insurance industry during natural disasters, combined with its solid financial performance and rising hedge fund interest, make it a compelling stock to consider in this category.
Conestoga Capital Advisors Mid-Cap Strategy stated the following regarding Copart, Inc. (NASDAQ:CPRT) in its first quarter 2024 investor letter:
“Copart, Inc. (NASDAQ:CPRT): CPRT is the leading provider of salvage auctions in the US, Canada and the UK. The company reported a solid quarter of unit volume improvement and continued margin gains. We believe favorable trends should improve as lower used car prices will drive a higher total loss rate, which results in more damaged vehicles going to Copart auctions.”
