Greg
Public Equities Commentary
LKQ is the real loser from driver-assistance and autonomous driving. As a buyer of salvage vehicles, it will service fewer volumes, whereas Copart earns a take rate on the rising dollar value of total vehicle losses. LKQ's European expansion has disappointed, and the stock is now priced for no terminal growth, which could prove right. x.comÂ
Mobileye has been dead money, down 35% over the past year, and an autonomous-driving future is not a reason to own it. x.com x.comÂ
Avis Budget Group's shorts are not wrong, and the concentrated hedge-fund longs look hard to monetize. Avis hasn't had a year of positive free cash flow in a decade, carries about $3.5B of net debt excluding cars, and faces obsolescence if self-driving cars cut the need to own or rent, while better-capitalized Uber is chasing the intermediary role. SRS effectively controls the board, so needed share issuance is unlikely, and selling its stake would collapse the price. x.comÂ
Copart looks more like a cyclical bet on insurance volumes than a durable leader. Its strengths were just as true in 2010-2020, yet something changed, and without identifying what would restore its lead over IAA, the case relies on volumes recovering. Rising ADAS penetration makes the volume problem look secular. x.comÂ
