$112.82 the high today. Its not going much higher. Rising rates, labor, and fuel. Tariffs will slow inter-modal volume. Heavily leveraged. Do dividend. (slightly high short interest however... 11%) Good short candidate.
The trucking stocks will eventually crash hard. Historically, the trucking companies expand the fastest by buying more equipment and building new and expansive corporate headquarters just before a negative turn in the U.S. economy. Right now freight rates are blasting through all-time records due to freight demand and sustantial capacity contraints induced by Obama era regulations. Equipment has become more exoensive and unreliable, disincentivising owner operators to expand. Owner operators have previously been a significant source of capacity. In addition many drivers retired early due to electronic data recording requirements for hours of service compliance. Furthermore, compliance of hours of service rules has reduced effective freight hauling capacity. Although driver pay is slowly increasing, it is difficult to attract a significant number of new drivers due to trucking company, law enforcement, and shipper practices of the past. XPO stock price will probably benefit from favorable quarterly earnings comparisons due to high freight rates all the way through the Christmas holidays. In addition, relatively high short interest may subject XPO’s stock to upward spikes on short covering panics. The load to truck ratio is an important trunking industry metric to be aware of and it is currently at decisive all-time records. Expansion of the trade wars, automated trucks by trucking industry leaders, expansion of alternative freight transportation such as rail(which helps XPO to a degree), yield curve inversion, or an economic slowdown will lead to a epic shorting opportunity of this and other transportation stocks. It is probably too early to persue a positional short position. Agile, short term traders may be able to navigate the typically high beta transportation stocks profitably by trading on both sides. The dry baltic index is also another metric to monitor for a early heads up on changing transportation industry conditions.
Great post. Thanks. Looking at a several year chart... its had quite the run. I think its priced in. To perfection.
No, I'm looking at other things too believe me. B of A downgraded it yesterday and I concur with their logic. All of the transports have similar charts. Maxpossiblesuffering also made some good points. If I thought like that I would have been wiped out 24 months ago don't ya think? My short calls in this forum are about 90% correct. I did miss CMG though.... and that had nothing to do with it being up, in fact it was down.
Pretty cool. ______________________ XPO, Nestlé building digital warehouse of future The U.K. facility, scheduled for completion in 2020, is touted as one of the most advanced distribution management centers in the world. Monday, June 18, 2018 XPO Logistics and Nestlé are co-creating a 638,000-square-foot distribution center at the new SEGRO East Midlands Gateway Logistics Park in Leicestershire, U.K. The facility, touted as a digital warehouse of the future, will be occupied predominantly by Nestlé, the world’s largest food and drink company, for its consumer packaged goods and will function as a test-bed environment for XPO technology prototypes prior to global release. The custom-designed distribution center, scheduled for completion in 2020, will feature advanced sorting systems and robotics alongside state-of-the-art automation co-developed with Swisslog Logistics Automation, according to an announcement Monday by XPO. The global provider of transportation and logistics solutions said the site’s digital ecosystem will integrate predictive data and intelligent machines to deliver one of the most advanced distribution management centers in the world. David Hix, Nestlé’s director of supply chain, said, “This is a world-first investment for Nestlé that builds on a century and a half of proud history in this country. Our partnership with XPO will encourage innovation and experimentation in our U.K. logistics operations and help future-proof our business. We will be able to be even more responsive for our customers across our brands.” The XPO-owned facility will be strategically located in the Midlands to benefit from direct access to the M1 motorway for road transport, the East Midlands Airport for cargo flights and an onsite rail freight terminal with direct access to the major U.K. ports of Southampton, Felixstowe, London Gateway and the Channel Tunnel. XPO said the facility will be sited on manmade plateaus, with landscaping to minimize the visual impact to nearby settlements. Additional sustainability measures include energy-saving LED lighting, environmentally friendly ammonia refrigeration, air source heat pumps for administration areas and rainwater harvesting. Richard Cawston, managing director of supply chain for XPO Logistics Europe, said, “Nestlé has entrusted XPO with the digital architecture for its future vision. Together we will create limitless opportunities to explore new technologies in a state-of-the-art logistics environment. The new East Midlands center will operate as both a think tank and a launch pad for XPO innovations, with far-reaching impacts on the way business is done.”
Very nice. I'm subscribing to the Vanzandt ET Market Service! Hope our world leaders iron out their trade differences before the Global economy, equities markets, commodities, and employment get crushed.