Copart: A Covid-19 Survivor

06/03/2020 6:00 am EST

Focus: STOCKS

Joe Duarte

Editor, Joe Duarte In the Money Options

Joe Duarte shares a unique stock that had outperformed the rest in the recent rally.

Copart (CPRT) is one of those companies whose business segment — brokering used car parts between body shops — insurance companies, and other interested parties is not at the top of anyone’s glamour list. Yet, the stock has proven to be a standout in the post Covid-19 rally (see chart below).

cprt

Moreover, if you read the company’s most recent earnings call you get a feel for a management team whose crisis management skills show why the company continues to lead its sector and why they are likely to survive this and many crises.

When the Covid-19 situation broke out, CPRT’s management team was all over it. First of all, they reassured their workers that no one was going to lose their job. Next, they drew their entire credit line and positioned themselves to stay in business. Then, they proved themselves to be essential by noting to law enforcement that if they didn’t pick up the crashed cars dotting the landscape after accidents and do their job then who would?

As a result, the company stayed in business with little change in their financial or business structure, and the chart proves it as the stock just broke above its 200-day moving average and is putting on the afterburners. At this point, it’s quite plausible to see the stock move back toward its pre-Covid-19 high, given its positive momentum. Nice work.

For an in depth look at how I analyze the markets check out my May 25, 2020 interview with Stockcharts.com’s David Keller on his show “Behind the Charts” on StockChartsTV. For air time and details click here. Joe Duarte is a former money manager, an active trader and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best sellingTrading Options for Dummies

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