CPRT

Supreme Court Case on Tariffs: The U.S. Supreme Court is considering a case that could potentially overturn tariffs imposed during Trump's presidency, which have affected various sectors including tech, retail, and energy, and could significantly impact market dynamics.

Potential Winners: If the tariffs are struck down, companies reliant on global supply chains, such as Nike, Apple, and Tesla, could see improved profit margins and stock prices due to reduced import costs.

Potential Losers: Conversely, domestic companies that benefited from the tariffs, like steelmakers and certain automakers, may face increased competition and pressure on their margins if the tariffs are removed.

Investment Strategies: Traders are advised to monitor long call setups on import-heavy companies while being cautious of bearish reversals in tariff-protected sectors, as market dynamics may shift rapidly following the court's decision.

Put Contract Overview: The $42.50 put contract has a bid of $2.45, allowing investors to buy shares at an effective cost of $40.05, which is a 2% discount from the current price of $43.16. There is a 64% chance the contract may expire worthless, offering a potential 5.76% return on cash commitment.

Call Contract Overview: The $47.50 call contract has a bid of $2.85, enabling investors to sell shares at that price if they buy at $43.16. This could yield a total return of 16.66% if exercised, with a 50% chance of expiring worthless, providing a 6.60% additional return if it does.

Volatility Insights: The implied volatility for both the put and call contracts is around 29%, while the actual trailing twelve-month volatility is calculated at 26%, indicating a stable trading environment for Copart Inc.

YieldBoost Concept: The article discusses the concept of YieldBoost, which refers to the additional returns investors can earn from options contracts, highlighting the potential benefits of both put and call strategies in the current market context.

RB Global's Turnaround: RB Global is experiencing a turnaround after a challenging year, with expectations for 2026 to be its first "clean year" since acquiring IAA, driven by easing auto market challenges and improving construction demand.

Analyst Upgrade: Bank of America analyst Michael Feniger upgraded RB Global to a Buy rating with a price target of $120, citing an improved risk-reward profile despite near-term headwinds affecting performance.

Growth Projections: The brokerage anticipates a rise in gross transaction value (GTV) from flat levels in 2024-2025 to mid-single-digit growth in 2026, supported by recovery in the Commercial, Construction & Transportation (CC&T) sector and increased market share in the auto segment.

Salvage Business Strength: The fundamentals of RB's salvage business remain strong, with rising repair costs and vehicle complexity differentiating it from the general used-car market, while the auto vertical is seen as a key growth driver.