Top 5 Safest Stocks To Own For 2015

Top 5 Safest Stocks To Own For 2015: Copart Inc. (CPRT)

Copart, Inc. provides online auctions and vehicle remarketing services in the United States, Canada, and the United Kingdom. The company offers a range of services for processing and selling vehicles over the Internet through its Virtual Bidding Second Generation Internet auction-style sales technology, to vehicle sellers, primarily insurance companies, banks and financial institutions, charities, car dealerships, fleet operators, and vehicle rental companies. Its services include online seller access, salvage estimation services, estimating services, end-of-life vehicle processing, virtual insured exchange, transportation services, vehicle inspection stations, on-demand reporting, DMV processing, flexible vehicle processing programs, member network, sales process, dealer services, direct services, and u-pull-it services, as well as CoPartfinder, an Internet-based used vehicle parts locator that provides vehicle dismantlers with resale opportunities for their purchases. Th e company sells its products to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, and exporters, as well as the general public. Copart, Inc. was founded in 1982 and is headquartered in Fairfield, California.

Advisors' Opinion:

• [By Geoff Gannon]

  The same rule applies here that I mentioned with Copart (CPRT) in an earlier article. Although Wal-Mart is an inferior business to Copart from a pure ROI standpoint, its still earning good returns on its investment.

• [By Geoff Gannon] t business. If you havent read about it, you should look into it. Its a good name to know in the event stocks fall at some point in the future and offer you a chance to buy at a good P/E.

  Anyway, Copart sells cars. Thats all it does. It has a tiny bit of the business in the UK that involves buying and selling cars. But normally its not a principal. Its just an agent. A broker. It doesnt ship cars. It ! doesnt buy cars. It just stores and sells cars. Copart is a great business. This is especially true because they achieve very high returns on their net tangible investment even though they choose to own rather than leases most of their locations. They own acres and acres and acres of land on which they store cars. You can find the addresses for their locations on their website (each car has a location associated with it that will pop up if you click on the car). Copy and paste that location into Google Earth. Youll be amazed at what you see. Anyway, they carry all this land which they then cover in cars and still they earn good returns on their tangible investment in the business without relying on the use of a lot of leases. So, its a very good and very interesting business.

  Now, if I said Copart sold cars, youd probably think that their revenues and earnings and free cash flow should rise and fall with U.S. car sales.

  If you look at the past 10 years for Copart and for U.S. auto sales youll see this is not true. Not even a little bit.

  Why is this?

  Well, theres this one tiny little detail I hid from you about Copart. Copart doesnt sell new cars. Copart doesnt sell used cars. Copart sells wrecked cars. They sell salvage.

  So, if you think of Copart as being in the auto retail business which they obviously are youll have an entirely incorrect understanding of the company. Thats true even if you understand the wider industry of car dealers pretty well. Copart sells cars. But they

• [By Geoff Gannon] wo companies in its industry that are public. The other company is part of a kind of conglomerate car sales company. That other company, KAR Auction Services (KAR), was much more explicit in detailing the competitive position of Copart and Insurance Auto Auctions. It even gave market share data.

  This is common. Often one company will choose not to give names or put percentages on certain competitive facts. The other company will do so. And even when tha! t is not ! the case, the two companies will often make statements that when taking together can give you rough indications of certain realities that neither company entirely intended to provide.

  The same is true for certain suppliers and customers. Although this is complicated by size. Very large customers of small companies are not good sources of information. But smaller companies often provide better insights into the larger suppliers, customers, etc., they deal with. That's because due to their small size more information is material and is explained in detail.

  I have found situations where one company simply says who the customer is that they are supplying. While the other company explains what product that supply goes into, the purchase amount, whether it is an exclusive arrangement, etc.

  So it is always important to at a minimum read the 10-Ks, 14As, and (where available) S-1s of every public company in the industry. This will give you a lot of insight into the competitive situation. Sometimes it is helpful to also look at customers and suppliers. However, this is not true of very large customers and suppliers because they will not discuss the specific area you are interested in.

  For example, Honeywell is a large customer of George Risk. It would do me no good to study Honeywell to learn about George Risk. Honeywell is a huge company. What they buy from George Risk is irrelevant to their shareholders. So they do not discuss it.

  An exception to this is

source from Top Stocks To Buy For 2015:http://www.topstocksforum.com/top-5-safest-stocks-to-own-for-2015-2.html