How do we determine whether Copart, Inc. (NASDAQ:CPRT) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Copart, Inc. (NASDAQ:CPRT) worth your attention right now? Investors who are in the know are holding their ground on the stock. The number of bullish hedge fund bets stayed the same during the third quarter, which is a slightly negative development in our experience, though not nearly as much when a stock already has a high level of investment, as this one does. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Ryder System, Inc. (NYSE:R), FLIR Systems, Inc. (NASDAQ:FLIR), and Energen Corporation (NYSE:EGN) to gather more data points.
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Today there are several indicators investors have at their disposal to appraise publicly traded companies. A duo of the most underrated indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top money managers can outperform the broader indices by a solid margin (see the details here).
Keeping this in mind, we’re going to view the latest action regarding Copart, Inc. (NASDAQ:CPRT).
How are hedge funds trading Copart, Inc. (NASDAQ:CPRT)?
At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, flat over the last quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ricky Sandler’s Eminence Capital has the largest position in Copart, Inc. (NASDAQ:CPRT), worth close to $140.5 million, accounting for 2.2% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $114.3 million position; 0.6% of its 13F portfolio is allocated to the company. Other peers that are bullish encompass David Costen Haley’s HBK Investments, Jeffrey Gates’ Gates Capital Management, and Robert Jaffe’s Force Capital.
Due to the fact that Copart, Inc. (NASDAQ:CPRT) has witnessed falling interest from the smart money, it’s easy to see that there were a few hedgies who sold off their positions entirely last quarter. At the top of the heap, Farallon Capital said goodbye to the biggest stake of the 700 funds tracked by Insider Monkey, worth an estimated $32.3 million in stock, and Peter Muller of PDT Partners was right behind this move, as the fund manager cut about $1.2 million worth of shares. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Copart, Inc. (NASDAQ:CPRT) but similarly valued. We will take a look at Ryder System, Inc. (NYSE:R), FLIR Systems, Inc. (NASDAQ:FLIR), Energen Corporation (NYSE:EGN), and MAXIMUS, Inc. (NYSE:MMS). All of these stocks’ market caps are close to Copart, Inc. (NASDAQ:CPRT)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| R | 29 | 297045 | -3 |
| FLIR | 26 | 213275 | 6 |
| EGN | 21 | 338924 | -9 |
| MMS | 10 | 157265 | 1 |
As you can see, these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $252 million. That figure was $634 million in Copart, Inc. (NASDAQ:CPRT)’s case. Ryder System, Inc. (NYSE:R) is the most popular stock in this table. On the other hand, MAXIMUS, Inc. (NYSE:MMS) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks, Copart, Inc. (NASDAQ:CPRT) is more popular among hedge funds and has far more money invested in it than any of the other stocks. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
