Konstskicklighet - PowerPoint PPT Presentation

March 16 2006 jay kutchins rcmp l.jpg
1 / 16

  • Uploaded on
  • Presentation posted in: Shopping

Insurance Auto Auction (IAAI): Offers online and traditional auctions, 75 ... sold to out of state buyers and 21% were sold to buyers out of country, based on ...

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

Download Presentation


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript

March 16 2006 jay kutchins rcmp l.jpg

March 16, 2006

Jay Kutchins


Outline l.jpg


  • Position

  • Company Overview

  • Macroeconomic Factors

  • Competition

  • Financial Figures

  • How Copart Makes Money

    • VB 2

    • Value-Added Services

    • Porter’s Five Forces

  • Excel!

  • Sensitivity Analysis

  • Recommendation

Rcmp s position l.jpg

RCMP’s Position

  • Bought 1000 shares on 2/28/03 at $7.82 per share

  • Currently (as of 3/16/06, 7:30PM) at $26.82

    • Represents more than 9.2% of portfolio based on market value

    • Up about 343% since purchase for a gain of about $19,010

    • Consistently one of RCMP’s top performers

Company overview l.jpg

Company Overview

  • Roll-up: buys smaller companies that have the same or similar enough operations

Car accident

Temporary storage

Inspected by insurance company

Cost of Repairs <


pay for repairs


Settle with the insured


Sell car to salvage vehicle sales company

Cost of Repairs >


car deemed total loss

Salvage vehicle sales company picks up the car

Storage until documents

are passed from car owner

and car is cleared by the DMV

45-60 days later the DMV gives

documentation to salvage vehicle sales

company and the car is ready to be sold

Company overview5 l.jpg

Company Overview

  • Factors the vehicle suppliers may consider when selecting a salvage vehicle sales company include

    • anticipated percentage return on salvage;

    • the services provided by the salvage vehicle sales company and the degree to which such services reduce administrative costs and expenses;

    • the price the salvage vehicle sales company charges for its services;

    • national coverage and ability to respond on a national scale; and

    • the ability to generate custom seller reports

Macroeconomic factors l.jpg

Macroeconomic Factors

  • Weather

    • Poor weather usually means more accidents, which can mean more vehicles for Copart to sell

  • Fuel prices

    • Higher fuel prices may lead to fewer miles being driven and thus fewer accidents

  • Auto accidents

    • If people get into fewer or less severe accidents Copart may have less inventory to auction

  • International Environment

    • More variables, less specific knowledge and experience

Competition l.jpg


  • Vehicle auctioneers:

    • Auction Broadcast Company: Could not locate at all

    • ADESA (KAR): 53 used vehicle and 36 salvage auction sites; Automotive Finance Corporation (AFC), a wholly owned subsidiary by ADESA, provides financing, auctions done on site

    • SADISCO: Online and traditional auctions, 25 locations only in the Southeast, incredibly confusing website

      • Insurance Auto Auction (IAAI): Offers online and traditional auctions, 75 locations, US broken down into 5 geographic areas

    • Manheim Auctions: Private, 135 locations internationally, appears to be premier company in the industry worldwide

  • Dismantlers:

    • Greenleaf: 23 locations, odd distribution throughout US (NV, AZ, TX, IL, MI, OH, MA, VA, NC, GA, FL); “recycling” and “environment”

    • LKQ Corporation (LKQX): 38 sales and processing and 12 distribution centers, primarily, but not exclusively, use auctions

Financial figures l.jpg

Financial Figures

Slide9 l.jpg


  • Virtual Bidding Second Generation

  • Copart’s pride and joy of fiscal 2004

  • Completely eliminated live auctions, which resulted in:

    • “Higher returns on vehicles for sellers

    • “Growth in the out-of-state and out-of-country sales

    • “Increased net income” -Copart Annual Report

Slide10 l.jpg


  • VB 2 BID4U

    • You enter in the maximum amount you are willing to pay, and bidding will be done automatically by the minimum increment allowed until your maximum amount

    • Maximum amount is completely confidential, Copart associates cannot even see it

Slide11 l.jpg


  • Technology has been in use for just over a year

    • Transition was even smoother than expected

      • No significant problems at all and only a few minor occurrences

  • “It has also improved the efficiency of our operations. For fiscal 2005, sales of vehicles to buyers outside the state where the vehicle is located accounted for 46% of total vehicles sold; 25% of salvage vehicles were sold to out of state buyers and 21% were sold to buyers out of country, based on registration.” -2005 Annual Report

Value added services l.jpg

Value-Added Services

  • “Internet bidding, Internet proxy bidding and virtual sales powered by VB 2 , which enhance the competitive bidding process;

  • on-line payment capabilities via our ePay product;

  • e-mail notifications to potential buyers of salvage vehicles that match desired characteristics;

  • automatic outbid notification by phone through VB 2  voice info;

  • sophisticated vehicle processing at storage sites, including ten-view digital imaging of each vehicle and the scanning of each vehicle’s title and other significant documents such as body shop invoices, all of which are available from us through the Internet;

  • CoPartfinder, our Internet-based used vehicle parts locator that provides vehicle dismantlers with greater resale opportunities for their salvage purchases; and

  • Offsite sales, which allow vehicle suppliers to sell any vehicle, boat, or heavy equipment without transporting it to one of our facilities.” -2005 Annual Report

Porter s five forces l.jpg

Porter’s Five Forces

  • THREAT OF NEW ENTRANTS: LOW; entry difficult and costly and face veteran competition

  • THREAT OF SUBSTITUTES: LOW; there are alternatives, but the industry exists because it is most often the best option

  • BARGAINING POWER OF BUYERS: LOW; buyers compete among themselves

  • BARGAINING POWER OF SUPPLIERS: HIGH; limited number of suppliers, limited amount of potential inventory

  • INDUSTRY RIVARLY: HIGH; competition from vehicle sales and auction companies and dismantlers, local, regional, national supply agreements with vehicle suppliers, competition in acquisition of salvage vehicle sales facilities

Financial analysis l.jpg

Financial Analysis

  • Excel time…yay!

Sensitivity analysis l.jpg

Sensitivity Analysis

Recommendation l.jpg


  • Final recommendation: HOLD the entire position of 1000 shares of Copart

    • Great company in an industry it does very well in, despite it being unattractive and unglamorous

    • Still have not fully realized the affects of VB 2, which should be worth sticking around for

    • Although analysis indicates the stock is still undervalued, the exposure to the company/industry is already considerable

  • Questions?

  • Login