Billionaire Spencer Hires Schroders Veteran to Manage His Wealth
Simon Brazier, 50, who previously worked at Schroders for more than a decade, becomes chief executive officer from Aug. 18 of the Nex Group founder's personal investment firm, known as IPGL, according to a statement.
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Yahoo
9 minutes ago
- Yahoo
Morning Bid: Tech angst on AI doubts
By Mike Dolan LONDON (Reuters) - What matters in U.S. and global markets today By Mike Dolan, Editor-At-Large, Finance and Markets In markets, the trigger for sudden confidence swoons is often elusive, particularly when looking at periodic rotations out of high-flying U.S. tech stocks. And most signs suggest this week's tech retreat may be more about re-positioning than investors receiving some lightning bolt of news. Tuesday's tech shakeout led to a 1.5% plunge in the Nasdaq index even as the blue chip Dow Jones Industrials Average hit a record intraday high. But the tech slump dragged the S&P 500 down 0.6%, and U.S. equity futures showed little sign of a bounce early on Wednesday. * Reasons for the sudden tech angst tended to be gathered after the event, with some pointing to comments late last week from OpenAI boss Sam Altman on inevitable bubbles in the sector and others pointing to different research papers fretting variously about both the limited returns on blistering AI spending to date and also its growing jobs destruction. The jitters also come ahead of next week's earnings report from chip behemoth Nvidia, some concern about the wider implications of the U.S. government's proposed stake in ailing chip giant Intel and caution ahead of the Federal Reserve's annual Jackson Hole conference this week. * Even though Fed concerns were cited across markets on Tuesday, there was little shift in Fed futures pricing during the day - and they still show just over an 80% chance of a rate cut next month. With Fed meeting minutes due later today and 20-year bonds under the hammer too, Treasury yields were flat and the dollar firmer. An unexpected pick-up in housing starts in July was reported on Tuesday but this was offset by a drop in building permits to five-year lows. * Tech-heavy stock indexes overseas were hit by Wall Street's wobble, with Japan's Nikkei losing 1.5% and South Korea's Kospi down 0.7%. Lifted on Tuesday by Ukraine deal hopes, European stocks were flatter today, with euro inflation coming in bang on forecast and a hotter-than-expected UK inflation reading downplayed due to seasonal airfare skews. Chinese stocks outperformed, with the Shanghai main index rallying to 10-year highs, as investors rotated stock holdings and hoped for more government stimulus. Be sure to check out today's column, which looks at a particular dilemma facing the Fed: should it ease to offset weakness in the housing market if that means spurring the blistering AI infrastructure boom? Today's Market Minute * U.S. and European military planners have begun exploring post-conflict security guarantees for Ukraine, U.S. officials and sources told Reuters on Tuesday, following President Donald Trump's pledge to help protect the country under any deal to end Russia's war. * Alongside a massive build-up in conventional military firepower, China has embarked on a rapid and sustained increase in the size and capability of its nuclear forces, according to the U.S. military and arms control experts. * British inflation hit its highest in 18 months in July when it increased to 3.8% from 3.6% in June, official data showed on Wednesday, once again leaving the country with the biggest price growth problem amongst the world's big rich economies. * A glaring mismatch between benchmark oil prices and expectations of a looming supply overhang has created an imbalance that could end badly for traders, writes ROI energy columnist Ron Bousso. * Trump has faced little opposition in his drive to rip up the global economic rule book. The only exception has been "the market". But now even investors are holding their fire, claims ROI markets columnist Jamie McGeever, enabling more risk to build up in the financial system. Chart of the day Americans are deeply concerned over the prospect that advances in artificial intelligence could put swaths of the country out of work permanently, according to a new Reuters/Ipsos poll. The six-day poll, which concluded on Monday, showed 71% of respondents said they were concerned that AI will be "putting too many people out of work permanently." Today's events to watch * Federal Reserve meeting minutes released (2:00 PM EDT); Board Governor Christopher Waller and Atlanta Fed President Raphael Bostic speak * U.S. corporate earnings: Target, Nordson, TJX, Lowe's, Estee Lauder, Progressive, Analog Devices * U.S. Treasury sells $16 billion of 20-year bonds Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (By Mike Dolan; Editing by Aidan Lewis) Melden Sie sich an, um Ihr Portfolio aufzurufen.
Yahoo
9 minutes ago
- Yahoo
Copart's Global Reach: How Top Market Presence Fuels Its Durable Duopoly
This article first appeared on GuruFocus. When I look at a business, I don't start by pulling up its stock chart. I start with a simpler, sharper question: If I could buy the whole thing at today's price and hold it for the next decade, would I? It's a filter Warren Buffett (Trades, Portfolio) has applied for decades and it forces you to think like an owner, not a trader. On paper, Copart (NASDAQ:CPRT) is an auto salvage auction company. That label undersells what's actually happening here. Beneath the surface, this is a platform business wrapped around a hard-asset network, with economics that get better the bigger it gets. It's the kind of operation that can turn every extra dollar of invested capital into an outsized amount of profit. The question isn't whether Copart is a high-quality enterprise the numbers speak for themselves but whether today's price leaves room for an investor to compound wealth without overpaying for the privilege. Copart's business is straightforward on the surface: it connects sellers of damaged, totaled, or otherwise unwanted vehicles with buyers around the world. Most sellers are large insurance companies, but rental car fleets, finance companies, and dealerships also use the platform. Buyers range from small repair shops and dismantlers to exporters shipping cars and parts overseas. Copart's system takes care of everything towing the vehicle from the accident site, storing it in one of its yards, photographing and listing it on its proprietary online auction platform, and managing the sale, paperwork, and compliance requirements. That's the visible process. The real value creation runs deeper. For sellers, Copart eliminates the hassle of dealing with non-drivable vehicles, speeds up recovery times, and often delivers higher resale values thanks to a global bidding audience. For buyers, it's a dependable, constantly refreshed source of inventory, accessible from anywhere. Revenue comes primarily from service fees on both sides, with ancillary income from storage and transportation. Once the infrastructure is in place, the incremental cost of processing one more car is minimal which is why margins expand as volumes grow. There are no messy segment splits or unrelated sidelines. It's one integrated model, deployed across more than 200 locations with over 10,000 acres of vehicle inventory. That simplicity is part of the moat there's no confusion about what the business does or how it makes money. Copart operates in one of the rare industries where the structure tilts heavily in favor of the incumbent. In the U.S., Copart and IAA (RB Global) together control roughly 80% of the salvage auction market, concentrating pricing power and scale efficiencies in just two networksCopart typically capturing the lion's share of incremental economics. In the U.K., the CMA puts Copart's insurance-customer share at 6070%, over three times the next largest competitora lead built on years of owned-yard infrastructure and seamless process integration. Internationally, the growth runway is substantial, with strong potential based on market trends. Germany's online salvage market is worth about $950 million in 2024 with a projected 21% CAGR through 2030. Brazil sits near $480 million with mid-teens growth, while India, at roughly $230 million, is expanding at an estimated 23% CAGR. Taken together, Copart's entrenched U.S. base and U.K. dominance already secure the bulk of the developed-world salvage auction value pool, while scalable expansion into Germany, Brazil, and India could add over $1.6 billion in addressable market within five yearsat growth rates far exceeding its mature U.S. segment. With RB Global still focused on stabilizing IAA's U.S. base, Copart has a clear first-mover window to entrench itself in these high-growth markets and deepen its network-effect advantage. Copart's scale gives it an even clearer edge. Large insurance companies, the core sellers, have some bargaining power, but switching platforms would mean re-engineering their claims processes and risking lower recovery values. Buyers, by contrast, are many and scattered dismantlers, exporters, repair shops with little individual leverage. There's also no real substitute for Copart's model at scale. Insurers could try running their own auctions, but they'd lose the pricing power that comes from a global bidder base and the operational efficiency of a platform built for this purpose. And building a competitor is far from simple. It's not just a matter of launching software. You need a network of strategically placed storage yards, the zoning and environmental approvals to operate them, a transport fleet, and deep integration with insurer claims systems all of which take years to build. The moat is multi-layered. Network effects create a self-reinforcing loop: more sellers attract more buyers, higher realized prices attract more sellers, and the flywheel turns faster. Economies of scale mean yard and technology costs are spread over more transactions. Switching costs are high for insurers because Copart is embedded into their workflows. And then there's the real estate storage yards near major metros and ports that would be nearly impossible for a new entrant to secure today. Over the past decade, that moat hasn't just held; it's widened. International expansion has opened new buyer pools. Cross-border sales have increased. Disaster response capabilities have been strengthened, cementing relationships with insurers during their most critical moments. Each of these moves makes the platform more valuable and more irreplaceable over time. Copart's cultural DNA is still stamped with the fingerprints of founder Willis Johnson. What started as a single salvage yard in California has grown into a global operator with over 250 locationsand Johnson's imprint runs through every operational decision. He's not just a historical figurehead; as of the latest filings, he still owns over 55.8 million shares, a 5.79% stake that keeps him aligned with shareholders. His son-in-law, Jay Adair, took the helm for more than a decade, steering Copart through its most aggressive growth phase before stepping into the Executive Chairman role in 2024. Adair remains one of the largest shareholders, holding 30.6 million shares, or about 3.17% of the company. The CEO's chair now belongs to Jeff Liawa long-time insider who's worn the CFO and COO hats. Liaw knows where the operational levers are, understands the claims-handling nuances that make Copart indispensable to insurers, and has the financial discipline to keep the moat widening. Insider ownership is high enough to anchor decision-making to long-term compounding rather than short-term optics. The capital allocation record reflects the same discipline. Expansion has come through targeted bolt-on acquisitions that strengthen the network, coupled with steady investment in new yard capacity to support future volumes. When the stock has traded at sensible valuations, management has stepped in with share repurchases never chasing the market, only acting when the math works. There's no dividend. Every dollar of retained earnings is directed toward high-return growth or opportunistic buybacks. For a high-ROIC business with a long runway, that's exactly where you want the cash to go. From fiscal 2014 to 2024, revenue grew from roughly $1.16 billion to over $4.24 billion, a compound annual growth rate around 13.8%. Operating margins have expanded from 27% to 37%, and net margins have held at roughly 32%. Return on invested capital consistently sits around 20%, which tells you that each dollar put back into the business is creating real value for shareholders. Free cash flow in fiscal 2024 came in at roughly $962 million, about 22.7% of revenue. Because Copart owns much of its land, capital expenditures are skewed toward expansion rather than maintenance, making it more capital-light than it might appear. The balance sheet is a fortress: over $4.38 billion in cash & short-term investments, and negligible long-term debt. This combination of strong cash generation and financial flexibility gives Copart resilience in downturns and optionality in pursuing new opportunities. While Copart's long-term appeal lies in its ability to compound steadily, the next few years offer clear drivers for growth. International expansion is still in its early innings, with fragmented markets in Europe, Latin America, and the Middle East ripe for consolidation. Severe weather events hurricanes, floods, hailstorms unfortunately produce spikes in salvage volumes, and Copart's scale and infrastructure allow it to respond quickly and profitably. The rise of electric vehicles is another subtle tailwind: expensive battery packs mean more EVs are declared total losses after moderate accidents, increasing salvage supply. Finally, deeper integration into insurer claims systems reduces the risk of churn and increases transaction volumes. At roughly $47 a share, Copart changes hands at about 30 times trailing earnings and 22 times EBITDA, with a free cash flow yield near 2%. Over the past decade, free cash flow has compounded at roughly 18% annually. If we dial that back to 15% for the next ten years and assume a modest 3% terminal growth rate, discounting at 8% gets you to an enterprise value of about $48.1 billion roughly 18% above where the market prices it today. Copart has rarely looked cheap on traditional multiples. The market has long been willing to pay up for a business with this level of moat, growth consistency, and return profile. At current levels, you're not stealing it, but you're not overpaying in a way that makes future returns an uphill climb either. The margin of safety is slim if you measure it purely on entry price but when the underlying machine compounds at this rate, quality can do some of the heavy lifting. No business is without risk. Copart's customer base is concentrated a handful of large insurers account for a significant portion of volumes, and losing one would leave a mark. The supply of salvage vehicles is linked to accident rates, the proportion of insured vehicles on the road, and miles driven. Any sustained decline in those inputs would ripple through revenue. Regulatory changes whether in title processing, environmental compliance, or cross-border trade could shift the economics. Overseas growth adds its own variables: cultural nuances, legal complexity, and execution demands. And far out on the horizon, autonomous driving could chip away at accident frequency, though that threat remains more theoretical than imminent. These are genuine risks, but they're not existential. Copart's fortress balance sheet, deep integration with insurers, and self-reinforcing network effects give it both the resilience to absorb shocks and the flexibility to adapt. Buying Copart outright today would mean paying roughly $40.8 billion on an enterprise value basis for a company that dominates its domestic market, enjoys duopoly economics, and generates margins and returns on capital that most CEOs can only dream about. It comes with billions in cash, no meaningful debt, and a management team that thinks like owners. Buffett once said, It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. Copart is firmly in the first camp. If you are searching for a 50-cent dollar, this isn't it. But if you're looking for a dollar that grows steadily in value each year and you're comfortable paying 80 or 90 cents for it, Copart deserves a place on your short list. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
11 minutes ago
- Forbes
SoundHound AI: SOUN Stock To $2?
SoundHound AI (NASDAQ: SOUN), a voice AI platform that helps businesses deliver conversational AI experiences, has certainly attracted investor interest with its AI-led growth narrative. However, the stock's history of sharp swings and recent market setup point to meaningful downside risk. The recent 10% drop on August 19, as investors took profits across growth names, underscores SOUN's sensitivity to shifts in market sentiment. Now, if you prefer upside potential with less volatility than owning a single stock, consider the High Quality Portfolio, which has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P midcap index—and has delivered returns exceeding 91% since inception. Also see – GE Stock To $500? Extreme Historical Volatility SoundHound's history shows a pattern of severe drawdowns during periods of market stress. Prior episodes offer a sober reference point for investors: This volatility reflects SOUN's profile as a high-beta growth name. With a beta near 3, SoundHound tends to move more than three times the broader market in both directions. See – Buy or Fear SOUN Stock? Fundamental Concerns Mounting Several fundamental pressures could deepen the downside: Market Structure Risks Structural dynamics could accelerate downside moves: Recession Scenario Impact A broader downturn could pressure key customer segments: The Path to $2 A 90% slide from recent peaks of about $20 implies a price near $2 per share. While extreme, similar moves have occurred. A deep recession could spark widespread de-risking, hitting high-beta growth stocks hardest. Earnings disappointments—missing revenue targets or pushing out profitability—can quickly erode confidence and prompt institutional selling. Heightened competition from large tech companies could also threaten SoundHound's positioning and growth outlook. If sentiment shifts away from AI and growth toward defensive sectors, SOUN's high-volatility profile leaves it exposed. Finally, in a liquidity crunch, institutions often sell their most volatile holdings first—stocks like SOUN can bear the brunt. The Verdict SoundHound AI operates in an attractive market, but its shares carry exceptional downside risk. The mix of extreme volatility, unproven profitability, and sentiment sensitivity creates conditions for severe drawdowns. History shows SOUN can fall 90% during market stress—a pattern that could recur if economic or sector headwinds build. This analysis zeroes in on downside risk and complements our separate assessment of upside drivers. For investors, position sizing and risk controls are essential with such high-volatility profiles. We apply a risk framework when constructing the Trefis High Quality (HQ) Portfolio, which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks have delivered better returns with less risk versus the benchmark—less of a roller-coaster ride—as shown in HQ Portfolio performance metrics.
