I have only heard of XPO here in Saul’s port but yesterday the CEO was interviewed on Mad Money with Jim Cramer. Here are some notes:
Fastest growing provider of logistics services
Acquiring major European $3.25B – gigantic deal, their first one outside North America – stock soared 15%
XPO using strong US currency to expand in Europe when Europe is still weak
(but Cramer thinks is starting to turn around)
Cramer has confidence in their ability to integrate, XPO has a strong history of making smart acquisitions
While revenues lower than expected, small earnings loss, mgmt raised revenue and EBITDA guidance, another acquisition of Bridge terminal transport services, largest asset- lite short distance service.
Stock went up on a bad day
Brad Jacobs – CEO
Company was originally United Rentals, which Jacobs ran
What is XPO? – largest last-mile logistics provider, 8 million deliveries a year to people’s houses, expedite, intermodal, largest cross border of Mexico provider, second biggest truck broker, a big player in contract
We don’t own the trucks, we have relationships – Ryder is a great customer of us
No layoffs in acquisitions, you don’t mind having trucking exposure – new company has trucking network – combo of asset and non-asset B plus Euro / year tuck brokerage.
Refrig delivered to house – XPO is the largest arranger of delivery of home appliance electronics, furniture…
About 2/3 deliveries by retailers, but more and more is outsources.
Intermodal – Mexico will be huge In-shoring – major taking NAFTA goods from Mexico to US. Leading players of north / south traffic b/w Mexico and US, mostly for auto companies
Last quarter – West coast port problem.
Is US economy getting better? Some doubt about that. Freight soft. It could go ether way but we’re early in the year.
It’s not boom or bust. Some difficult comparisons over last year (snow).
For viewers, is there an opportunity to buy lower through stock issuing?
(non answer from CEO)
Got to revenue targets 3 years ahead of schedule – do small acquisitions now? — we do both – just this week 5.5 billion in Europe, 100 million deal in NC – 1000s of players in this area that may be available for acquisition. Small deals that are strategically important. Transportation and logistics 300 Trillion industry. We don’t have the same competitor in all our lines of business.
Cramer: Growing fastest of any company Cramer has had on.
Very transparent company, it tells you everything – please do the homework please read the presentations.