Copart (NASDAQ: CPRT) provides owners of salvage vehicles with a full range of online remarketing services. The firm's auction format allows such clients as insurers and rental agencies to display their vehicles to licensed dismantlers, rebuilders, used car dealers and exporters in more than 85 countries. Most of the vehicles offered are damaged, trade-ins, or repossessions. Copart also operates a search engine for used parts and provides vehicle storage at 136 facilities in North America and the UK. The company sells over a million vehicles a year.
The firm pleased investors last week, when it reported fiscal Q1 EPS of 41 cents and revenues of $184 million. Analysts had been looking for 38 cents and $173.3 million. BB&T Capital Markets subsequently reiterated its "buy" rating on the shares and Barrington Research repeated its "outperform" recommendation.
The CPRT price popped on the news and has since been defining a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers now recommend the issue with three "strong buys", four "buys" and one "hold". Analysts see a 15% average annual growth rate, through the next five years. The stock's Price to Book ratio (3.91), Sales Growth rate (39.29%), EPS Growth rate (28.13%), Operating Margin (34.76%), Net Profit Margin (23.44%), Return on Assets (14.24%) and Return on Investment (15.98%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 71% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $27.36 and $41.99. A stop-loss of $36.25 look good here. Recent regulatory filings show that directors bought shares in the $40.26-$41.50 range.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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