Unlikely to make the front page of The Wall Street Journal, some of the best long‑term investments come from places few people are really paying attention to at the time.
Not the flashy stuff.
Not the “next big thing.”
Just boring, behind‑the‑scenes businesses quietly doing their job exceptionally well.
And one of those companies is Copart.
Chances are, you’ve never woken up with excitement to research salvage vehicle auctions. Fair enough… It’s not exactly cocktail‑party material.
But history is full of examples where the unsexy businesses ended up being phenomenal investments.
Copart is a mid-cap company with a market cap of roughly $32 billion. Headquartered in Dallas, Texas, it employs around 11,600 people. Their business is pretty straightforward: They help insurance companies and other vehicle suppliers process and sell salvaged vehicles through auctions.
Think totaled cars. Flood damage. Vehicles that are no longer economical to repair.
Those cars still have value. Someone just has to connect them to the right buyer at the right price.
That’s Copart’s world.
Most of those vehicles are purchased by licensed dismantlers, rebuilders, exporters, and used car dealers around the globe. Copart operates across the U.S., Canada, U.K., Brazil, Germany, Middle East, and parts of Europe, though the U.S. still accounts for more than 80% of revenue.
At its core, Copart is an infrastructure company for the automotive ecosystem.
Insurance companies rely on them. Repair shops rely on them. Parts recyclers rely on them.
Copart sits quietly in the middle, facilitating an enormous volume of transactions without much fanfare.
Years ago, these auctions were held in person. People showed up. They raised paddles. Geography mattered.
That eventually all changed.
Copart moved the business online through its proprietary Virtual Bidding Third Generation platform, or VB3. That shift removed geographic barriers entirely. Now, bidders from around the world can participate instantly, which dramatically expands the bidder pool and improves pricing dynamics.
On top of that, Copart layered in towing, storage, logistics, and other ancillary services. It’s no longer just an auction platform, but a full-service ecosystem.
Here’s where it gets interesting.
Copart is not marketed as an “AI company.” It doesn’t get lumped in with the flashy software names. But behind the scenes, they’re already deploying artificial intelligence in very meaningful ways.
The company is using AI for business analytics, document processing, dispatch operations, customer support, and internal productivity. Their engineering teams are increasingly integrating AI tools into day-to-day operations, and several purpose-built systems are already in production.
Co.ai uses computer vision and machine learning to help assess total-loss decisions. IntelliSeller helps optimize auction decisions. Their Title Express platform uses large language models to speed up title procurement, which is no small task in this business. AI also helps power buyer recommendations and auction search results.
This isn’t theoretical.
Management has talked openly about real productivity gains and plans to continue expanding AI deployment where it genuinely adds value.
Another quiet advantage is how resilient the business model is.
Tariffs and trade tensions have been a huge topic in the automotive world. Imported parts get more expensive. Repair costs rise. Insurance companies feel the pressure.
Copart is largely insulated from those dynamics.
They aren’t dependent on global supply chains for parts, because their inventory already exists right here at home. Damaged vehicles aren’t going away. In fact, as cars get more expensive and stay on the road longer, the dynamics arguably tilt further in their favor.
The average vehicle age in the U.S. has climbed to a record 12.8 years. Meanwhile, average new-car prices are approaching $49,000.
That combination makes repairs more expensive and total losses more common.
And that environment feeds directly into Copart’s system.
Historically, the stock has been exceptional. Since its IPO in 1994, Copart shares have risen more than 22,000% (roughly a 220x return) compared to about 28x for the S&P 500 over the same period.
In my opinion, that kind of track record earns some respect.
That said, this isn’t a victory lap.
Growth has slowed. Insurance volumes have softened. Copart has been more reluctant than competitors to aggressively cut fees to protect market share, while others have been willing to play offense. Elevated uninsured rates and insurers diversifying vendors have added pressure as well.
So, this could be a turning‑point period for the company.
Still, the fundamentals are hard to ignore.
Free cash flow remains strong. Returns on invested capital consistently exceed 15 percent. The balance sheet carries minimal debt. This is a conservatively run business that tends to think long‑term.
Leadership matters too.
Jay Adair joined the company in 1989 and now serves as Co-Chairman. He owns roughly $884 million worth of Copart stock, which says a lot about where his incentives lie. CEO Jeff Liaw assumed sole leadership in 2024 and owns approximately $2.65 million in shares. Not massive, but not nothing either.
Today, the stock trades at roughly a 33% discount to its own five-year average price-to-earnings multiple. If the business stabilizes and sentiment improves, a move back into the low-to-mid $40s doesn’t seem unreasonable.
Is it flashy? No.
Is it easy to explain at dinner? Probably not.
But great investments do not need to be exciting. They need to work.
Sometimes the best opportunities hide in plain sight, doing the unglamorous work nobody else wants to talk about.
What’s one under‑the‑radar company you like to invest in?
Disclaimer: The views expressed in this blog are solely those of Austin Wilson and do not necessarily reflect the views of Hixon Zuercher Capital Management. Hixon Zuercher Capital Management and its clients may hold positions in securities mentioned. Nothing in this blog constitutes investment advice or a recommendation to buy or sell any security. All investments involve risk, including possible loss of principal. Please consult your financial advisor to ensure any investment aligns with your objectives and risk tolerance. Indices are unmanaged and not directly investable. Any investment in securities, funds, or other financial instruments will involve costs and fees, including but not limited to fund expense ratios, management fees, and transaction costs. This content is provided for informational purposes only and is not intended to comply with the requirements of the Investment Advisers Act of 1940 or any other applicable securities laws. Past performance is not indicative of future results.
