James TelfserTFI International IncTFII.TOHOLDJan 23, 2013

Freight cycle has started to recover. Record earnings. Management sets it apart. Key has been buying smaller companies and making them stronger. Its success allows it to keep increasing the dividend and buying back shares. Ranks 9/10, upside potential of ~30%. Yield is 1.41%.

Risk here is that the freight recession continues beyond the 4.5 years already. He thinks it's ending. Capital intensive. Execution risk and headwind of higher interest rates. Best operator in a tough industry. Really poised to grow EPS materially this year. 

Acquisition of UPS freight in US gives them an avenue to growth. Probably 1% of the market in a fragmented space, so many opportunities to consolidate. Decent balance sheet. Strong FCF, buybacks. 18x PE for 2028, modelling 26% EPS growth. Yield is 1.26%.

Has owned this for decades, good and bad. Is now at an all-time high. The PE is ahead of itself. Are great capital allocators. Expects more spin-offs and purchases.

He just sold in the last few days, after a very good run that met his target. Nothing bad to say about the company, great management. The sale was purely a valuation call. He'd probably gladly buy back at a lower price.

Taking profits is never a bad thing. You reduce your risk and monetize your gains.

We've been in a freight recession, but at the first signs of this recession ending, this stock has catapulted back to previous levels. However, the fundamentals haven't recovered, just the excitement that things are getting better. Momentum kicks in, driven by algorithms and retail investors.

(Note the short timeframe.)  Organic improvements plus coming out of freight recession. He just sold his position to deploy proceeds elsewhere. (Industry's still improving, so perhaps he sold too early.)

Still off all-time highs, but recovering nicely. Added more in the past year. US manufacturing finally turned the corner last month. Dynamic earnings for next 2-3 years. Shares not fully valued, and buybacks are ongoing instead of M&A.

Prefers truckers to rails right now. Got decimated on this name, but it's recovered ~30% in last few months. Trucking spot pricing has improved. US manufacturing data came out today and it was good. He's feeling really good about the US economy. 

Really nice-looking chart. Definitely broke out of its base and has kept on going. Really constructive that it broke out of $140 and then $150 and held each time.

M&A model. They buy something, fix their balance sheet over time, and then do it again. Cyclical.

#1 would probably be Telus. BCE is also in there. Names like AC, MFI, PRL, GSY, WFG, and TFII. All of these stocks are cheaper than they ought to be. All things being equal, those names should be higher in January than they are now.

No secret that we're in one of the longest freight recessions in history. Plus, an additional hit from tariffs. Just look at that chart. Attractive on valuation. Too cyclical and risky for her firm. But if you have a strong risk appetite, this could be your opportunity.

Instead, there might be an opportunity in the rails. Higher barriers to entry than for trucking.

Trucking and transportation are struggling right now. Tariffs have caused volumes to fall. If you think that tariffs will recede at some point, or a deal gets done between Canada and the US, then this could be a wonderful opportunity. It depends how it fits in your portfolio.

Right now facing headwinds, so investors are selling off. Plus it's tax-loss selling season.

Should trade at much lower multiples than it has historically. Cult-like following. Reputation of management is somewhat overblown. Better places to put money.

Knows this well. It's managed well. Tariffs hit them. Managers can fix this. He'd buy it here, but it will be depressed for a while.