5 Retail Stocks to Buy According to Greg Poole’s Echo Street Capital

3. Copart, Inc. (NASDAQ:CPRT)

Echo Street Capital’s Stake Value: $112.7 million

Percentage of Echo Street Capital’s 13F Portfolio: 0.79%

Number of Hedge Fund Holders: 42

Copart, Inc. (NASDAQ:CPRT) is an online vehicle auction services platform that is headquartered in the United States and serves customers in the country and all over the globe. Its online platform allows banks, insurance companies, sellers, dealers, and individuals to connect with each other.

For its fiscal Q3, Copart, Inc. (NASDAQ:CPRT) brought in $810 million in revenue and $1.07 in non-GAAP EPS, beating analyst estimates for both. Truist raised the company’s price target to $175 from $160 in November 2021, believing that a strong market position combined with low costs and low leverage implies strong future growth.

As Q3 2021 ended, Echo Street owned 812,881 Copart, Inc. (NASDAQ:CPRT) shares in a $112 million stake which represented 0.79% of its portfolio. An Insider Monkey Q3 2021 study of 867 hedge funds outlined that 42 owned the company’s shares.

Copart, Inc. (NASDAQ:CPRT)’s largest investor is Kevin Oram and Peter Uddo’s Praesidium Investment Management Company. It owns 978,046 shares worth $135 million.

Merion Road Capital Management mentioned Copart, Inc. (NASDAQ:CPRT) in its Q2 2021 investor letter, outlining that:

“Many of our companies reported very strong earnings back in April. The market shrugged these off as it pondered how much growth would be sustainable, are inflationary trends transitory, and when interest rates will rise. While a slow-down in the broader economic recovery would hurt our portfolio, I remain positive on our position’s market positioning and longer term trends.

For instance, Copart reported 33% YoY revenue growth with EBIT margins expanding to 45%, an all-time high. While the company benefitted from inflation (an interesting hedge the market largely ignored earlier in the year), sustainable increases in ASPs and service offerings bode well for revenue per vehicle growth. Management noted that traffic is still down 20% or more as non-US markets are several months behind the United States on reopening and vaccinations. This volume boost should provide good tailwinds in the coming months.”