COPART INC

48.04 -1.3 (-2.71%) Sell

CPRT is a falling knife, continues to bleed every investor trying to catch it

13 min read

COPART INC significantly underperformed on Friday. It delivered -2.71% to close at 48.04. On a day when the overall market breadth was 35%, it closed higher than 5% of the market. In comparison, the benchmark SP500 index closed today at -0.0191%.

[Themes containing CPRT]

CPRT showed a strong bearish trend over the last 3 months. During this period CPRT delivered -24.62% and saw a maximum drawdown of -27.8%. There was a short signal during this period which returned +13.57%.

Trend

CPRT has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 29 Jan, 2016 to 11 Sep, 2018. Over the last 2 years 11 months and 10 days, CPRT outperformed the SP500 index on 56% days.

During the last three months CPRT was mostly loss making and delivered on average -0.4% per day. It's best return during this period (of +5.9%) was on Wednesday, 21 Nov, 2018. While it's worst loss in the same period (of -13.39%) was on Wednesday, 19 Sep, 2018. The longest stort-term trend during this period was 6 losing days, which started on 29 Nov, 2018 and ended on 7 Dec, 2018. This bearish trend lost -8.9% of investor capital.

The last 12 months saw CPRT's investors making profits in 9 months and incurring losses in 3 months. During the last year, CPRT delivered profits in more months than SP500 index. CPRT was also a more risky investment than SP500 index as it's worst month in the last year, Sep 2018, returned -19.87% compared to -7.28% returned by SP500 index in Oct 2018. CPRT had a longer winning streak of profitable months than SP500 index. It went up in 8 straight months (from Jan 2018 to Aug 2018) during which period it delivered +42.21%.

How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.
-- Robert G. Allen

CPRT is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in CPRT's volatility from 18 Sep, 2018 to 19 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CPRT has significant positive skewness in it's return distribution. This indicates that investors can expect CPRT to recover from drawdowns quickly. Which makes CPRT a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than CPRT. Therefore, SP500 must receive a lower allocation than CPRT in your portfolio. SP500 index usually has shorter drawdown period than CPRT.

Based on your interest in CPRT you may find it interesting to know that AAXN, PTC and EHC are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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