Following Great Public Companies, Watchlist Investing

Watchlist Investing

Following Great Public Companies

Exploring timeless investing concepts in the search for great businesses.

Thematic (Sector/Industry)

<ul><li>This looks like a very unusual bank. It’s effectively an investment portfolio with a bank charter.</li><li>Two-thirds of its assets are in its HTM portfolio, with another ~13% in equities.</li><li>Just 10% of assets are in loans. And it has a grand total of one branch.</li></ul>

This looks like a very unusual bank. It’s effectively an investment portfolio with a bank charter.Two-thirds of its assets are in its HTM portfolio, with another ~13% in equities.Just 10% of assets are in loans. And it has a grand total of one branch.

Equity Bottom-Up

Copart, Inc. provides vehicle suppliers, primarily insurance companies, with a variety of services to process and sell salvage vehicles through auctions. Salvaged vehicles are primarily sold to licensed dismantlers, rebuilders, and used vehicle dealers.

<ul><li>Copart made two separate acquisitions of around $100 million that show up completely differently on the statement of cash flows.</li><li>In 2022, it paid $106.6 million for Hills Motors, a UK-based parts recycler.</li><li>In 2024, it paid $112.1 million for 80% of Purple Wave, a heavy equipment auctioneer.</li></ul>

Copart made two separate acquisitions of around $100 million that show up completely differently on the statement of cash flows.In 2022, it paid $106.6 million for Hills Motors, a UK-based parts recycler.In 2024, it paid $112.1 million for 80% of Purple Wave, a heavy equipment auctioneer.

What the Cash Flow Statement Won’t Tell You

Copart, Inc. is a multinational provider of online vehicle auction and remarketing services, specializing in the sale of salvage, clean title, and non-repairable vehicles. The company offers a comprehensive service portfolio including vehicle processing, transportation, and title services to a global clientele of insurance companies, fleet operators, and individuals. Copart was founded in 1982 and is headquartered in Dallas, Texas.

<ul><li>Copart and ACV will combine in a friendly cash transaction that values ACV at $1.9 billion. Enterprise value = equity value as ACV has no net debt.</li><li>Copart is paying 2.5x ACV’s 2025 revenue and 32x adjusted EBITDA.</li><li>The deal is expected to close by the end of the calendar year and will eat up 40% of Copart’s current $4.5 billion cash/equivalents.</li></ul>

Copart and ACV will combine in a friendly cash transaction that values ACV at $1.9 billion. Enterprise value = equity value as ACV has no net debt.Copart is paying 2.5x ACV’s 2025 revenue and 32x adjusted EBITDA.The deal is expected to close by the end of the calendar year and will eat up 40% of Copart’s current $4.5 billion cash/equivalents.

ProShares Short Russell2000 / Equity Bottom-Up

ProShares Short Russell 2000 is an exchange-traded fund incorporated in the USA. The Fund seeks daily investment results that correspond to the inverse (opposite) of the daily performance of the Russell 2000 Index.

<ul><li>Funny enough, this Microcap addition crossed my desk two weeks ago while working with a private investment coaching client.</li><li>ARKO is a convenience store/fuel station roll-up with retail stores, wholesale fuel distribution, and a lock card fueling business.</li><li>The company’s strategy has centered on buying cheaper assets/chains, keeping the good ones, and converting the remainder into customers of its wholesale business. </li></ul>

Funny enough, this Microcap addition crossed my desk two weeks ago while working with a private investment coaching client.ARKO is a convenience store/fuel station roll-up with retail stores, wholesale fuel distribution, and a lock card fueling business.The company’s strategy has centered on buying cheaper assets/chains, keeping the good ones, and converting the remainder into customers of its wholesale business. 

Mainfreight Limited provides and supplies freight, warehousing and logistics services throughout New Zealand and Australia.  The Company provides freight forwarding services by road, rail, sea and air along with providing international freight forwarding services, customs clearance services and specialized handling of hazardous substances.

<ul><li>Mainfreight came on my radar thanks to Jessie Rancourt, a friend and fellow value investor, who mentioned it during a subscriber meetup a few months ago.</li><li>Mainfreight is in the supply chain logistics industry, an extremely broad category covering a huge segment of the world economy and harboring (pun intended) many niches and specialties.</li><li>I decided a look at the company would fit in well with my coverage of Old Dominion Freight Line (ODFL | Disclosure: None) in the U.S. less-than-truckload space and Triumph Financial (TFIN | Disclosure: Long) in the banking-cum-truckload finance space.</li></ul>

Mainfreight came on my radar thanks to Jessie Rancourt, a friend and fellow value investor, who mentioned it during a subscriber meetup a few months ago.Mainfreight is in the supply chain logistics industry, an extremely broad category covering a huge segment of the world economy and harboring (pun intended) many niches and specialties.I decided a look at the company would fit in well with my coverage of Old Dominion Freight Line (ODFL | Disclosure: None) in the U.S. less-than-truckload space and Triumph Financial (TFIN | Disclosure: Long) in the banking-cum-truckload finance space.