Opinions
David Driscoll
CH Robinson Worldwide
CHRW-Q
BUY
Mar 21, 2019
Stock price when the opinion was issued
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Trucking company. He is a big fan of logistics companies. This has had a fabulous run. Amazon is a procurement agent where people can get product delivered to their homes. This company does short-haul deliveries in the US, and might be well positioned. A better position for a recovery in the US comes in terms of intermodal, and might be more beneficial for this company. Thinks you have to wait for this to slip.
Has owned this since 2012-2013. This is logistics for trucking and transport. It was mostly US, but have gotten into airfreight marine with their latest acquisition of a logistics company in New Zealand and Australia. Because the headcount is so low, this is known as an asset light business, where the current assets are greater than the total liabilities. Chances of going bankrupt are slim to nil.
They are a freight forwarder. They arrange for either the shipper to get their goods to market or a purchaser to bring goods to market from elsewhere in the world. They are victims of deglobalization. They become a lot less necessary if goods are going to travel shorter distances. He says that Amazon has also disrupted this market; it has become the Uber of logistics. Merchants can sell through Amazon and let it take care of shipping their products anywhere. Amazon has commoditized freight. He believes that freight forwarders will participate in the economic cycle but they will be much less important in the future because of the decline of trade and because of the added presence of companies like Amazon that can basically find the empty space on any truck to get a product to market.
A supplier, not a competitor, of Amazon. Peers include rails or trucking companies. They're cyclicals, so buy them when there's a selloff. If you get a good entry point, a good company to look at.