TFI International Inc (TFII-T)

Added recently on the selloff. Trading at 15x 2025 earnings, so it's cheap. Fundamentals score 10/10. A contrarian value play, about 40% upside from here.

If we're going into a slowdown, this name is expensive. Balance sheet is OK. FMV is ~$147. Immediate downside target of $100 or so. Don't be in too much of a hurry to get in. A lot of other stocks have more upside potential. 

Q4 was a stinker, guidance was very tough. Tariff worries are weighing on capex spending of many of its customers. If tariffs are implemented, could still take another hit.

Stock's fallen way too much, he can't believe it's still going down. Trading at very deep discount to normalized earnings. Screaming buy, but you have to look through the next few quarters of uncertainty.

Applauds decision to reverse course on moving to US. Pretty weak Q4, drawdown of 40%. Since 2000, stock's generated total return of 16,000%, so pullbacks are buyable. Management capable of addressing and resolving problems. Good consolidator of fragmented industry. Now trading at 14x PE, discount to its 5-year average of 16x. Incredible entry point. Yield is 2%.

Just had significant miss in the segment that's 40% of its business. Q4 was way worse than feared. Overreaction to downside. Thinks earnings have likely bottomed, as he thinks tariffs won't happen. Looks really good at 11x 2026 earnings, with 18% EPS growth rate for 2025-2027 -- really nice PEG ratio. At 8.3x, cheaper than peers.

The proposed, and then reversed, move to the US is just noise. Good growth stock, buy when weak but not if we're going into a recession. He's more inclined to buy now than to wait for Tariff Tuesday next week.

70% of revenue base is located outside Canada, so makes some sense. As well, once you become a US company you're no longer subject to Trump's tariffs. Not great for corporate Canada.

There could be freight recession and the trucking market could turn around. TFI's price has held up very well in a 5 year chart. If looking for recovery potential TD has more potential than TFI.

Share prices have held up very well over 5 years, not reflecting a feared shipping recession. More upside as this recovers, though less than TD.

Large player. Significant operations in US. One of the only large caps he owns in his fund. Great compounder at over 20% a year. Fantastic acquisitions. CEO excellent at allocating capital. Good growth and liquidity.

TFII has been a great compounder. We think $190 to $195 would be a good range for more buying. 
Unlock Premium - Try 5i Free

Post-election in the US, prospects for the US economy and domestic manufacturing will be good for the transportation sector as a whole. This name stands to benefit.

A new addition to his dividend growers mandate. Top flight management team. Lean operating philosophy to maximize efficiently matching freight with trucks. Company's discipline is its magic. History of consolidation. Two years of a manufacturing and freight recession may be turning a corner. Sees it returning to double-digit earnings growth next quarter and accelerating. Analysts see 27% EPS growth in 2025, 24% in 2026. 

Trades at 18x PE, a good combination of value and growth. Compound earnings growth of 20% over the last 5 years, sees that accelerating. Yield is 1.31%.

Tough slog for freight traffic. Hard to know if that's cyclical, or because we're coming off the insane activity of 2021. Unionized, whereas some competitors are not. Not a great quarter; UPS Freight acquisition hasn't panned out as expected.

Thing is, it generated $270M USD of free cashflow in a very poor quarter. Insanely great. Tells you how well it will do when market picks up. Will eventually split into 2 companies, and valuation gap with US peers will narrow.

EPS of $1.60 missed estimates of $1.78; revenue of $2.185B missed estimates of $2.27B. EBITDA of $357.2M missed estimates of $371.2M. EPS did rise from $1.57 last year. Revenue rose 14% with acquisitions helping. Truckload revenue rose 80%, logistics rose 2.5%. Operating income rose 1.3%. The dividend was raised by 13%. The company noted "Business conditions for US LTL are challenging". Still free cash flow was $270M, up 37% from the prior year. We expect investors will be a bit disappointed, with the dividend hike offsetting a bit. We would be OK buying some if it dips a few dollars, but the after market trading right now is quite muted, at least so far (down 1.3%). 
Unlock Premium - Try 5i Free  

Well run, but very cyclical. Its collection of assets is not worthy of the multiple. Rail is the most efficient way to ship freight. In this higher inflationary environment, he'd prefer a rail such as CNR or CP.