The Motley Fool Take Profits From Parts

If you’d like to invest in the auto industry but are worried about disruptions from electric vehicles threatening your investments, consider Copart (Nasdaq: CPRT). It’s in the business of selling junked, wrecked and otherwise salvaged cars and recently sported a market value near $7 billion. Copart is the kind of company that enters the picture at the end of an automobile’s life. Running auctions primarily of vehicles salvaged from auto accidents and facilitating their resale to buyers planning to dismantle said vehicles, Copart doesn’t really care what kind of fuel those cars and trucks (used to) run on. It’s concerned with squeezing the last bit of value out of a dead automobile before it goes to the great junkyard in the sky. Over the past five years, the company has increased its earnings per share by almost 150 percent, through a combination of expansion, cost efficiency and share buybacks. Over that period, net income has increased 121 percent, while management has repurchased almost 10 percent of shares outstanding. There’s likely more growth in Copart’s future. It has been expanding its relationships with some of the United States’ largest auto insurers, and the auto-salvage business is still ripe for further consolidation, both domestically and in the other 10 countries where the company operates. Copart’s economies of scale are a big competitive advantage, too. (The Motley Fool has recommended Copart.)