Should You Consider Adding Copart (CPRT) to Your Portfolio?

Merion Road Capital, an investment advisor, released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, Merion Road Small Cap Fund returned -3.5% compared to a 6.2% return for the Russell 2000 Index and 3.2% for the Barclay Hedge Fund Index. Along with this, MRCM Long Only Large Cap returned -6.4% compared to a -4.9% return for the S&P 500 Index. For the full year 2022, Merion Road Small Cap Fund declined 17%, and MRCM Long Only Large Cap was down by 35%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Merion Road Capital highlighted stocks like Copart, Inc. (NASDAQ:CPRT) in the Q4 2022 investor letter. Headquartered in Dallas, Texas, Copart, Inc. (NASDAQ:CPRT) is an online vehicle auction and remarketing services provider. On January 16, 2023, Copart, Inc. (NASDAQ:CPRT) stock closed at $62.82 per share. One-month return of Copart, Inc. (NASDAQ:CPRT) was 4.16%, and its shares lost 8.10% of their value over the last 52 weeks. Copart, Inc. (NASDAQ:CPRT) has a market capitalization of $29.921 billion.

Merion Road Capital made the following comment about Copart, Inc. (NASDAQ:CPRT) in its Q4 2022 investor letter:

Copart, Inc. (NASDAQ:CPRT). CPRT is like a steam roller crushing over any barriers in its path. If used auto prices are up, CPRT benefits from higher pricing on lower volumes; when prices are down, they make less per car but volumes increase. All the while the company continues to increase their ancillary offerings, grow the industry domestically, penetrate new geographies, and steal market share. While this may seem effortless from the outside, internally they have an intense focus on improving their product and satisfying their customer. Not much has changed with CPRT during the year. Revenue and EBITDA increased 23% and 12% over the past twelve months. CPRT fell 20% and ended 2022 at $60, had $3 of net cash on their balance sheet and is poised to generate $2.50 in free cash flow implying a 23x multiple.”

Copart, Inc. (NASDAQ:CPRT) is not on our 30 Most Popular Stocks Among Hedge Funds list. As per our database, 49 hedge fund portfolios held Copart, Inc. (NASDAQ:CPRT) at the end of the third quarter, which was 50 in the previous quarter.

We discussed Copart, Inc. (NASDAQ:CPRT) in another article and shared the list of losers on November 17, 2022. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.