XPO chart Chat

This article says stay away since it is showing a head-and-shoulders pattern, which points to failure if it can’t “hold the neckline”. It bounced off the neckline the day of earnings and then sliced through the next day. Maybe better opportunities at a lower price now?



This WSJ article (Pay?) is negative on XPO…

Two of the fastest-growing freight transportation services companies in the U.S. are having a hard time turning their acquisitions into profits.

XPO Logistics Inc. and Echo Global Logistics Inc., both of which reported quarterly earnings on Wednesday after markets closed, are at the center of a growing consolidation trend among third-party logistics operators, which arrange transportation and logistics services for retailers and manufacturers. The trend has accelerated this year with United Parcel Service Inc.’s recent announced purchase of Coyote Logistics LLC and FedEx Corp.’s buy earlier in the year of GENCO.

“These are rapidly growing guys who are investing and that weighs on margins,” said Jack Atkins, an analyst at Stephens Inc. “The issue XPO has in particular is that they have grown so rapidly that they are investing heavily in systems, in hiring, and they are buying with debt and that serves to mute out profitability.”

XPO and Echo both have made more than a dozen acquisitions in recent years and show no signs of changing course. In an interview, XPO Chief Executive Bradley Jacobs said the company is likely to make at least one more acquisition this year, part of a larger strategy to build revenues from a forecast $9.5 billion this year to $23 billion in 2019

Mr. Jacobs said in an interview after the market closed on Thursday that he did not believe the activity was a response to the company’s earnings report, saying XPO was caught up in a broader market decline.

Don’t like that denial in the last sentence. Own it dude!

Mr. Jacobs said in an earlier conference call with analysts that he expects long-term gains from selling additional XPO services to customers of the companies he buys, such as helping customers of European trucker Norbert Dentressangle SA, which XPO bought earlier this year, expand their business across the Atlantic.