There are no safe havens in the stock market. Every stock carries risk. But some less than others. This column features stocks that have shown one or more of the following characteristics: less volatility, better earnings, larger market caps, safe and increasing dividends. In these times of turmoil, our goal is to show readers better opportunities for investing with fewer risks.

May 10, 2010 - Copart, Inc. (CPRT-NASDAQ) provides online auctions and vehicle remarketing services in the United States, Canada, and the United Kingdom. It 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, vehicle rental companies, and the general public.

It primarily serves licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, and exporters, as well as the general public. As of July 31, 2009, the company operated 147 facilities in the United States, Canada, and the United Kingdom. Copart, Inc. was founded in 1982 and is headquartered in Fairfield, California.

In 2009, sales and earnings dropped for Copart. Revenues had grown consistently as the company expanded. Earnings grew evey year since 2000 except one, 2003, when they dipped a penny. Since then, they've only improved, going from 87 cents to $1.10, $1.21, $1.46, to $1.74. Then in 2009, they fell to $1.64. On the sales side, revenues went from $784.8 million in 2008 to $743 million in 2009.

Management didn't like that so they changed a few things. It opened its Web site, restricted to a subscription model previously, to the public. They made the process easier for sellers to use the site. They increased marketing efforts in the auto racing circuits putting ads in NHRA and NASCAR events. Website monthly traffic more than doubled over the same time last year. Also,the company signed an exclusive supplier of salvage vehicles contract with Allstate which will expand CPRT's U.S. market share.

Analysts like what they see. They've got a consensus estimate of sales at $764 million, up 2.8% this year, then $810.48 million next year, up 6.10%. Fiscal year ends July 31. On the earnings side, 7 analysts see $1.77 this year, an improvement over last year's $1.64, then project $2.12 next year. Next quarterly earnings should be out in late May. Look for 50 cents a share, slightly higher than the 48 cents of last year's third quarter. For the final quarter, expect 45 cents, above the 41 cents of last year's fourth.

The company is moving into Europe and will most likely continue to expand globally. In the U.S., look for new stores to open at a rate of 5 to 10 a year for many years to come. With good cash-flow and no debt on the books, the company has flexibility as to how it can fund expansion.

More numbers: Trailing P/E is 20.85; Forward P/E is 17. Price to sales ratio is 3.94. Price to book is 2.92. Book value is $11.89. Operating margin is a notable 31.03% while Profit margin is also noteworthy at 19.86%. Return on equity for the last 12 months was 16.03% while Return on assets was 13.72%. Total cash is $189.29 million for $2.25 a share. Again, there is no debt. Current ratio is 3.27. There are 84.29 million shares with a Float of 73.12 million. Insiders own 11.59% of all stock. Institutions have 90.20% of the Float. There is no dividend.

Conservative investors won't see this stock as too exciting, except that some of the numbers are compelling, such as the Operating and Profit margins as well as the Return on equity. Still there's nothing that will be a catalyst for a quick move in the stock. And the valuations are high on some ratios or data. But spending more time with CPRT will be worthwhile, especially if there's another dip in the stock that puts it below $30. Then it becomes very interesting.

- Company Web site: www.copart.com

Ted Allrich