TFI International Inc (TFII.TO)

The biggest player in the trucking industry in Canada, and one of the bigger ones in North America. He doesn’t like the trucking space at all. There are very low barriers to entry. A very competitive industry. (See Top Picks.)

Transforce, the trucking company. A number of analysts downgraded it for the first quarter. We saw preannounced lousy results from US truckers recently. He thinks that at the end of the day, since they are very good capital allocators, that this will be a gift from the gods. 14 times PE.

This does full truckloads as well as partial loads and e-commerce deliveries. It is in every facet of the delivery business. One of the leaders in its sector. Dividend yield of 2.15%. (Analysts’ price target is $34.89.)

(A Top Pick April 5/16. Up 54.8%.) A really, really good business. Just sold his holdings, not because there was anything wrong with the business, but there is just less upside going forward and he needed capital for other investments. Fully valued now.

A great stock, and he is looking at it very, very closely. It ranks really well in his model. He likes that it makes acquisitions that the market isn’t fully appreciative of. Trading at about 12.5X forward expectations. The US transport stocks have really rallied, and some of them are trading at 15-18 times earnings. Feels this has pretty good upside here.

Has been pretty happy with the performance this year; it is up about 14%. This is in the shipping/trucking business. They do trucking as well as packaging and couriering. They have a division out West which is moving equipment for oil/gas. Recently sold their garbage division and used the cash to buy back shares. He is still buying this for clients.

(Top Pick Aug 14/15, Up 11.14%) There is a good opportunity to cut costs. He likes it but does not own it any more. He moved on.

A really smart operator in a really bad industry. Trucking is not a good business, but their ability to basically outsource the trucks and trailers from Saputo (SAP-T) about 20 years ago, turned it into the business that we see today. Management has done a phenomenal job by running a slightly better business than everybody else, in a terrible industry. Today it is about an 11% free cash flow yield on 2017, with M&A potential. Good management.

(A Top Pick Aug 14/15. Up 2.95%.) Sold this to move into CNR (CNR-T). He continues to like the company. They are doing a good job in their acquisition and consolidation strategy, and pay a decent yield. Still a Hold.

(A Top Pick July 2/15. Down 5.23%.) A consolidator in a very fragmented industry. Trucking rates have been weak, which has held them back. He still thinks there are legs on this story. Dividend yield of 2.9%.

There have been multiple spikes in volume, and every time there is a spike, there is a drop. It is acting well and looks great, but is very, very toppy in the high $20s. Has good support at $22. Looks like it is going to be very range bound for quite some time, barring news of some sort.

LTL trucking. We are seeing a head and shoulders pattern with overhead supply. Investors buying over $24 are looking to sell.

A free cash flow machine. The trucking Index in the US is at a 52 week high, and this company hasn’t followed, because they had put a Dutch auction to buy back $200 million of stock up to $22. It capped a little, and you are now seeing it drift over $22. Of the $200 million, only $60 million was tendered, which means a) the company’s $22 was a very opportunistic price and b) shareholders thought it was a very low price, so he feels it is probably worth more than $22. At the same time, they are investing quite a bit in "last mile", developing a relationship with Amazon (AMZN-Q), which is taking over the retail world. Has one of the best COs in Canada. Dividend yield of 3.08%.

Trucking, courier and hauling large equipment in the oil country, which has not been a good part of their business. Did an exciting deal by selling their waste management business. They now have a big cash collection where they are planning to do a Dutch Auction for some of the shares, which they will use to reduce debt. Trucking has been tough in Canada, but he is seeing data of improving truck tonnage in the US, where they have a lot of exposure. Also, has big exposure to Google (GOOG-Q) and Amazon (AMZN-Q), and is involved in same day shipping with a lot of online retailers. An interesting way to play on-line growth over time. Pays a nice dividend. Trading at around 10-11 times earnings, and it is undervalued.

The selling of their garbage assets out East made perfect sense, so it is now just a pure play on trucking. Doesn’t think the market is punishing them because of the sale of their asset. Trucking stocks have all come down, because of the fear that the US and Canadian economies are rolling over into a recession, especially here in Canada. People believe that volumes are coming down and that there is excess capacity in the US. Since half of their revenues come from that, there are fears that rates will start to come down. There have been talks about pressures over the last while. This is probably a good bet right now at this lower valuation.