First a message from our friends at The Oxford Club (sponsor) |
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Dear Reader, |
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No press release. No announcement. No tweets. |
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And here's what's strange... |
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And my colleague Alexander Green believes this fund is about to become the most talked-about investment in America. |
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Good investing, |
Rachel Gearhart
Publisher,The Oxford Club |
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FEATURED ARTICLE |
The Market's Unsung Heroes: 5 "Boring" Stocks That Keep Beating the Index |
If you've ever felt like the market only rewards the loudest stories — meme surges, AI moonshots, "next big thing" headlines — you're not alone. |
But here's the uncomfortable truth that quietly makes money: the stocks that compound the most often feel… unremarkable. No cult CEO. No viral product. No dramatic "pivot." |
Just repeatable economics, pricing power, and cash-flow discipline. |
And when you look at the scoreboard, the market has been very consistent about rewarding that boring profile. Over the last 10 years, the S&P 500's annualized return has been about ~14.6%.
That's a strong hurdle — but a handful of "non-flashy" companies have beaten it for years, often while staying outside the mainstream conversation. |
Today's mission: build a Cheap Investor-style "Unsung Heroes" watchlist — companies that: |
Consistently beat the market over long windows Have durable moats that don't rely on hype Still look reasonably priced (cheap vs. peers, cheap vs. their own history, or cheap relative to business quality)
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Let's hit five. |
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1) Copart (CPRT): the "wrecked car" tollbooth most investors ignore |
What it does (simple):
Copart runs online vehicle auctions — mostly salvaged cars (insurance total-loss vehicles) and used vehicles. In plain English: when cars get wrecked, Copart gets paid to process and auction them efficiently. |
That sounds niche. It's not. |
Copart sits at the intersection of: |
Higher repair costs (more "total losses") Complex insurance logistics Global demand for parts and used vehicles Digitized auction infrastructure
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Why the market keeps paying up for it:
Because the economics are clean. Copart has posted fat margins that most companies can't touch. In fiscal 2025, Copart's net profit margin was ~33.4%.
That's software-grade profitability… in a "boring" industrial workflow business. |
The consistency scoreboard:
Copart's 10-year annualized total return is ~24% (depending on measurement window, around ~24.2%).
That's not "good." That's market-beating by a mile over a decade. |
Is it "cheap" right now?
Copart isn't a deep value stock. It's a quality compounder — and the market knows it. Yahoo's key stats show CPRT with a forward P/E around the low-to-mid 20s.
So where does "cheap" come in? |
Cheap can mean: you're paying a fair price for a business that rarely breaks.
Copart's model is resilient because it benefits from structural trends (insurance salvage flow + digital auction scale), not one-time product cycles. |
What could go right (next 12–24 months): |
More total-loss volumes if repair inflation remains sticky International expansion and network effects Operating leverage (it already has scale; incremental volume is lucrative)
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What could go wrong (your risk checklist): |
A severe decline in accident frequency over time (safer cars, autonomy) could reduce supply — though "total loss" dynamics also depend on repair economics, not only crashes Regulatory and title/auction rules are always a background risk Competition is real — but Copart has scale + insurer relationships that are hard to replicate
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Cheap Investor takeaway:
Copart is the kind of "boring machine" that wins quietly. You're not buying a storyline — you're buying a tollbooth on a messy part of the economy that isn't going away. |
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2) Rollins (ROL): the pest-control compounder that never stops crawling higher |
What it does:
Rollins owns Orkin and other pest-control brands. It's recurring service, route density, sticky customers, and pricing power that's surprisingly durable. |
This is a classic "people underestimate how non-negotiable the product is" business. |
The hidden moat:
Pest control has: |
Local density economics (route efficiency improves margins) Recurring contracts High trust/service switching friction A "need," not a "want" component
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The scoreboard:
Rollins has delivered a ~19% 10-year annualized total return (again, depending on the exact measurement window, ~19.1% shows up in common datasets).
That is elite compounding for something most people don't even consider an "investment theme." |
Recent operating proof (not vibes):
Rollins reported that 2025 was its 24th consecutive year of revenue growth.
That's the kind of "boring streak" you can build a portfolio around. |
Is it cheap?
This is the catch: Rollins often looks expensive on P/E. Its forward P/E is listed around the mid-40s.
So why include it in a "cheap" piece? |
Because "cheap" can be risk-adjusted.
A business that rarely experiences existential risk, rarely faces demand collapse, and has consistent pricing power can be "cheap" relative to the stability of its cash flows — especially when investors are rotating away from fragile, cyclical narratives. |
What could go right: |
Continued pricing power in services Acquisition integration and route density gains A market that re-prices stability higher during volatility regimes
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What could go wrong: |
Labor costs and route inefficiencies Competitive intensity in local markets Multiple compression risk (if the market refuses to pay "premium for boring")
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Cheap Investor takeaway:
Rollins isn't a bargain-bin stock — it's a boring compounding engine. If your goal is to own businesses that can survive almost any tape, this belongs on the short list. |
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3) Brown & Brown (BRO): the insurance broker quietly printing steady wealth |
What it does:
Brown & Brown is an insurance broker — it helps place policies for businesses and consumers. It doesn't take underwriting risk like an insurer; it earns commissions and fees for distribution and service. |
Why that matters:
Broker models can be attractive because: |
They scale with premiums (which rise with inflation) They're asset-light relative to insurers They can grow via acquisitions and cross-sell
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The long-term return profile:
BRO's 10-year annualized total return has been ~16–17%.
That's steady market-beating compounding with less headline drama than most "hot" sectors. |
And here's where it gets interesting for "cheap":
BRO's forward P/E is around the mid-teens (~15.4) in common datasets.
For a consistent compounder, that's not crazy — and depending on market mood, it can even look conservative versus other "quality" names. |
Why brokers can keep winning even when markets wobble: |
Insurance is a necessity (businesses must insure assets and liabilities) Premium inflation can lift broker revenue Renewal cycles create recurring economics
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What could go right: |
Premium pricing stays firm across commercial lines Acquisition roll-up continues (brokers are natural consolidators) Operating leverage from scale
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What could go wrong: |
Softening insurance pricing cycle reduces growth tailwind Acquisition integration risk Competitive pressure from other brokers and digital platforms
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Cheap Investor takeaway:
If you want a "non-sexy" way to own the inflation + risk-management economy, brokers like Brown & Brown are quietly powerful — and this one isn't priced like a hype stock. |
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4) Allison Transmission (ALSN): the under-the-radar industrial cash machine |
What it does:
Allison makes automatic transmissions and propulsion solutions, including for commercial and defense applications. This is an industrial business with real customers, real replacement cycles, and real switching friction. |
Why investors overlook it:
Because it's not a "story stock." It's a "keep trucks moving" stock. |
And "keep trucks moving" turns out to be a pretty good business. |
Balance sheet / operating quality markers (the numbers): |
Fiscal 2024 net profit margin ~22.7% Fiscal 2024 return on equity ~44.3% Fiscal 2024 current ratio ~3.04 (liquidity cushion)
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Those are not weak stats. That's a company that generates real profitability and has financial flexibility. |
Guidance and scale:
In its Q3 2025 update, Allison guided to 2025 net sales around $2.975B–$3.025B and net income $620M–$650M, with adjusted EBITDA guidance also provided.
That's a real earnings base, not "maybe someday" cash flows. |
Is it cheap?
ALSN's forward P/E is around ~12 on Yahoo's key statistics.
That's the kind of number value investors love — especially for a business with durable end markets and strong margins. |
What about returns?
Return calculations vary by source, but ALSN has been a strong multi-year performer; some datasets show double-digit annualized performance over long windows.
The bigger point is the setup: you're not paying a premium multiple. |
What could go right: |
Continued demand in commercial vehicles and specialty applications Margin resilience and disciplined capital returns Any re-rating if the market decides industrial cash-flow machines deserve higher multiples
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What could go wrong: |
Cyclicality: commercial vehicle demand can soften Competitive technology shifts Customer concentration and capex timing
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Cheap Investor takeaway:
If you want "cheap" to actually mean cheap — not just "less expensive than Nvidia" — ALSN is the kind of name that shows up when you screen for profitability + reasonable valuation. |
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5) Comfort Systems USA (FIX): the "infrastructure behind infrastructure" monster (with a valuation caveat) |
What it does:
Comfort Systems provides mechanical and electrical contracting services (HVAC, controls, building systems). In today's world, that increasingly ties into: |
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This is the "picks-and-shovels" layer beneath big capex trends. |
The return profile is insane:
FIX has posted a 10-year annualized total return around ~45–50% in many datasets.
That's not normal. That's "how is nobody talking about this?" territory. |
So… is it cheap?
Here's the honest part: FIX is not cheap on headline multiple right now. Yahoo shows a forward P/E in the ~40s.
You're paying up for execution and growth. |
But "cheap" can still apply relative to peers in some contexts (some sources argue the P/E is lower than comparable contractor peers). |
Why keep it on this list at all?
Because your "unsung hero" bucket should include at least one name where the market has already recognized the compounding — but where the business still has structural tailwinds, and you wait patiently for pullbacks. |
What could go right: |
Continued industrial and data-center buildout demand Service and retrofit work remains sticky even if new projects slow Operating leverage and regional density advantages
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What could go wrong: |
Multiple compression (the biggest risk) Project timing/capex cycles Labor and input cost management
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Cheap Investor takeaway:
FIX is the poster child for "boring execution beats hype." But for entry points, you want patience — and a pullback plan. |
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The Cheap Investor "Unsung Hero" Scorecard |
Here's your quick daily cheap list filter for this category: |
1) Does it have a repeatable need?
Insurance, pest control, salvage auctions, transmissions, building systems = not optional. |
2) Does the business throw off real margins?
Copart's net margin (~33%) is a standout example. |
3) Are you paying a reasonable multiple for the stability?
BRO (~15 forward P/E) and ALSN (~12 forward P/E) are the type of "cheap-but-not-broken" profiles value investors hunt. |
4) Has it beaten the market over a full cycle?
S&P 500 ~14.6% annualized over 10 years sets the bar.
CPRT (~24% 10Y) and ROL (~19% 10Y) clear it comfortably. |
5) What's your "pay up" limit?
Some compounders are wonderful businesses but terrible entries. If the multiple is extreme, don't force it — put it on the watchlist and wait. |
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The portfolio angle: how a bargain hunter uses these |
If you're building a balanced "boring wins" sleeve, here's a simple framework: |
Core stability + reasonable valuation: BRO, ALSN High-quality compounders (pay up, but monitor entry): CPRT, ROL Turbo compounder watchlist (buy pullbacks, not euphoria): FIX
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You're not trying to predict tomorrow's headline. You're building a set of businesses that can keep compounding while everyone else is chasing dopamine trades. |
Because here's the trick:
the market's "unsung heroes" don't need your attention to perform — they just need time. |
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investing involves risk, including the potential loss of principal. Always do your own research before making investment decisions. |
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