Why Alluvium Bought Copart (CPRT) Despite the Long-Term Autonomous Driving Risk

Alluvium Asset Management, an asset management firm, disclosed its second-quarter 2026 investor letter for the Conventum – Alluvium Global Fund in a release titled "Why Alluvium Bought Copart (CPRT) Despite the Long-Term Autonomous Driving Risk." The letter can be accessed via the provided link. In Q2 2026, the fund experienced a slight decline in value, with a 1.4% decrease in EUR terms, 2.2% in USD terms, and 3.9% in AUD terms.

The portfolio's performance was mixed, with Alphabet gaining from robust cloud growth, while select holdings like Robert Half, H&R Block, and others demonstrated solid gains. However, cable businesses and several healthcare and consumer-related stocks negatively impacted overall returns. The fund's Q2 2026 letter highlighted Copart, Inc. (NASDAQ:CPRT), a company specializing in online auction and vehicle remarketing services.

Copart, Inc. (NASDAQ:CPRT) closed at $30.75 per share in September 2026. Over the past month, the shares of Copart, Inc. (NASDAQ:CPRT) yielded a 0.14% return, while their 52-week performance saw a decline of 32.24%. With a market capitalization of $29.65 billion, Copart, Inc.'s shares have fluctuated between $26.81 and $48.96 throughout the past year.

Conventum – Alluvium Global Fund's second-quarter 2026 letter revealed that the firm initiated a new position in Copart, Inc. (NASDAQ:CPRT), a once small auto salvage yard in Vallejo, California, which has now evolved into a car auction technology platform. This platform sells over 4 million cars annually on behalf of insurance companies.

Initially flagged by the firm's quantitative screen, the business exhibited compelling growth figures, including a ten-year sales growth rate of 17.4% and a 19.1% profit growth rate. The company showed negligible debt and a return on invested capital of approximately mid-30s. However, the fund sees Copart, Inc. (NASDAQ:CPRT) as a part of a duopoly with limited potential for domestic growth that could significantly impact the business.

The company derives most of its revenue from providing services to insurance companies for vehicles classified as total losses. Two key factors were considered in analyzing the long-term viability of Copart, Inc.'s business: the expected decline in automobile accident rates due to the increasing adoption of autonomous driving technology, which has proven to have lower crash rates than human-driven vehicles; and the sustained upward trend in the proportion of future collisions resulting in cars classified as total losses, driven by advancements in technology and escalating repair costs.

The fund believes that the balance of these factors significantly influences the risk and reward equation associated with investing in Copart, Inc. (NASDAQ:CPRT).