XPO Logistics, Inc (XPO-N)

The whole freight sector has been terrible for a while, then TFI recently reported a lousy quarter. XPO is -15% in one week, despite reporting okay earnings earlier this month.

Is up 105% this year. She took some profits in September. They're taking market share and trade at 8.5x EBITDA vs. Old Dominion's 18x. That's a huge gap they can close. UPS's struggles worry her, though they are slightly different companies. Is a little nervous ahead of earnings.

It's isn't cheap now, but it is compared to peers like Old Dominion. Management is super, correcting previous problems. This stock is okay here to hold, but wouldn't buy more given the economic backdrop.

He used to own it for its value. Then it spin out two companies. Doesn't own it now because of the freight environment.

Companies like this can still move up in a tough economic environment. The upgrades show that there is a lot of value in this stock.

Companies like this can still move up in a tough economic environment. The upgrades show that there is a lot of value in this stock.

Is higher despite downgrades today. They spun off GXO and RXO. It now trades at 6x EBITDA vs. peers of 10x or 18x, so it's trading at a discount. XPO gained market share last quarter. Shares ran up 32% year to date before earnings, but expectations were so high, so shares fell back after the report. Still, it's cheap vs. peers and run by superior management.

It's economically sensitive. A tremendous value creator. Has always been a dirt-cheap stock that he once owned, and will own again, just not now. The money will go more towards FedEx and UPS, though.

GXO spin-off Splitting up a business can unlock value. GXO is the spin-off from XPO whose CEO boasts a long record of creating value when he ran United Rentals. The CEO consolidated in a highly fragmented industry by buying many companies. From 2014-2018, shares quadrupled. Then, the stock stumbled until last December 2020 when XPO did the spin-off. XPO kept the freight transportation and truck brokerage business, while spinning off the lucrative contract logistics division to make it the second-largest company in this space globally. Which one to buy? The XPO spun-off has given XPO a 73% gain since Jan. 2020. GXO has already surged from $57-79 after only a few weeks. People want a logistics stock, important to the new e-commerce economy. He likes both. XPO has more upside. GXO's warehouses give great exposure to e-commerce and logistics outsourcing, powerful long-term trends. GXO could be lowballing its forecasts and faces little competition in this space. There's still room to run here, too.