Copart is a leading remarketer of salvaged vehicles in the U.S. and around the world. The company operates a network of salvage yards (10k+ acres) used to store vehicles before they are put up for auction on Copart’s online bidding platform called VB3. According to the company’s website, Copart has 265k+ cars available daily for auction stored at their 200+ salvage yards and sells 3M+ vehicles each year to buyers from 190+ countries.
Thanks for a well articulated and researched piece Hamilton. One question - I didn't understand the right to win in international geos? There is network effects and location of yards advantage in US, I assume one can put in capital initially (1P model rather than 3P) and create liquidity for network effects to kick in, but if the yards are an important part of the moat puzzle then with getting in late into the geography, would Copart have cheap access to attractive yard locations? Also, have they broken down economics of international ops? Thank you.
Thanks for the brilliant analysis. One question - how will the EV trend influence the thesis? I guess the lifecycle for a vehicle would go down and residual value of an EV may go up as battery materials are quite expensive and some metal recycling companies may come to the field?
Thanks one more time for the brilliant analysis. I was re-reading it and cannot get over the puzzle of the company's ROIIC. Given that Copart spends around 80% - 85% of it's capex budget on land acquisition and development and the fact that the CFO says that the cap rate on these land investments are hardly above WACC (which I assume is nowhere near 10%) - how does the company still manage to get enormous returns of 35% - 60% on it's capital? I'm clearly missing something!?
Hi Hamilton, very nice analysis, thanks much! I found CPRT via CACC's shareholder letters, where Mr. Tom Tryforos, one of CPRT's director, was mentioned. I'd like to read the Forbes article and the book. Btw, assuming more catastrophic events hit in the future, how would that impact the performance of CPRT and IAA? Maybe I miss it somewhere, have you touched on the overal growth rate for the whole industry? Looking forward to your insights and thanks! Happy new year! -Dunyu, TX.
Thanks for a well articulated and researched piece Hamilton. One question - I didn't understand the right to win in international geos? There is network effects and location of yards advantage in US, I assume one can put in capital initially (1P model rather than 3P) and create liquidity for network effects to kick in, but if the yards are an important part of the moat puzzle then with getting in late into the geography, would Copart have cheap access to attractive yard locations? Also, have they broken down economics of international ops? Thank you.
Thanks for the brilliant analysis. One question - how will the EV trend influence the thesis? I guess the lifecycle for a vehicle would go down and residual value of an EV may go up as battery materials are quite expensive and some metal recycling companies may come to the field?
Thanks one more time for the brilliant analysis. I was re-reading it and cannot get over the puzzle of the company's ROIIC. Given that Copart spends around 80% - 85% of it's capex budget on land acquisition and development and the fact that the CFO says that the cap rate on these land investments are hardly above WACC (which I assume is nowhere near 10%) - how does the company still manage to get enormous returns of 35% - 60% on it's capital? I'm clearly missing something!?
Hi Hamilton, very nice analysis, thanks much! I found CPRT via CACC's shareholder letters, where Mr. Tom Tryforos, one of CPRT's director, was mentioned. I'd like to read the Forbes article and the book. Btw, assuming more catastrophic events hit in the future, how would that impact the performance of CPRT and IAA? Maybe I miss it somewhere, have you touched on the overal growth rate for the whole industry? Looking forward to your insights and thanks! Happy new year! -Dunyu, TX.
it's a small thing compared to the great content, but i appreciate the layout/structure !