Copart Inc. (CPRT)

Has underperformed recently. He sold it around $35. It's in junk auctions (i.e. crashed cars). Growth is lagging a peer, which is linked to an insurance company to give it an edge. Also, in the US car insurance is so expensive (record levels of people driving without car insurance). So, there are fewer cases of cars being sent to Copart to be repaired or sold. Long term, CPRT is a great business with a great balance sheet. He will watch it, but lacks growth now.

He owned it as of yesterday, and today he doesn't. 

Sold, not because it's a bad business or there won't be growth, but it's facing a lot of challenges. Not exposed to fastest-growing US insurer. Lots of people in US are driving without insurance, a real headwind. Long-term, concern is autonomous vehicles and getting into fewer accidents.

Valuation's lowest it's been in a long time. Beautiful balance sheet. Founder still has significant stake in the business.

See his Top Picks to see where he put some of the proceeds.

A real punch in the face. Temporary. In the US, people can't afford the high price of car insurance so they're not insuring their vehicles. It just has the wrong customers right now compared to competitors. Hopeful this turns as insurance prices come down. 15% of market cap is in cash. Getting into auctions for heavy equipment.

Down 31.8% last year. Are losing market share and trades at 23x PE. Not cheap.

They deal in car parts and scrapped cars that have been in accidents. This year, their problem is that inflation is making fewer people buy car insurance, therefore reducing scrap volumes to CPRT. Also, their big competitor is competing more with CPRT. That said, people are getting into more accidents and there are more cars on the road. He is still buying this.

Is involved in auto auctions. Strong volumes, so their business is doing well. Organic revenues are up 9% last quarter. So what if it missed earnings expectations? Does a company growth top and bottom line faster than the overall market. Great balance sheet. Robotaxis will likely get into as many accidents as non-robos, so are a tailwind.

Has been on his watchlist for many years. Recently came down to values he's seriously considering. Within about 5% of his buy price. Exceptional company. Tech company that helps insurance companies auction damaged cars. Global. Came down on earnings because growth not as robust. Long-term phenomenal business.

Sideways trading range. He'd be much more confident if we could clear the $60 level decisively. Seems like dead money until that happens.

Auctions cars. More cars are being written off, often due to unfixable technological complexity. Perfect balance sheet. Getting into other verticals such as international markets and heavy equipment. Has grown by double digits for a long time, well run. Winners keep on winning. No dividend.

Founder led/owned which is positive. Smart real estate acquisitions. Stable returns on capital. High margins. Current share price a little high. Would buy if price fell to 20x earnings (50% reduction in current share price). 

More car accidents are being written off as total losses. CRT enjoys a duopoly. A growing market as cars grow more complex with EVs and sensors. Great for them. Trades at a reasonable PE.