XPO Logistics (NYSE:XPO)
is quite possibly one of the most controversial names I follow, with
every article I write seemingly bringing more than its share of "I'll
believe it if/when I see it" skepticism on the company's
growth-by-acquisition plans. There is no doubt that management's
strategy is exceptionally aggressive and the company has shifted (or
perhaps broadened) its strategy from asset-light truck brokerage to a
more comprehensive third-party logistics (or 3PL) portfolio.
There
are good reasons to be skeptical of stories like XPO Logistics. Rampant
M&A makes it harder to suss out the real underlying performance of
the business and creates opportunities for accounting that runs from
ambitious to aggressive to outright wrong. On the other hand, the shares
are up more than 80% from when I first wrote on them
and the 3PL sector not only offers good underlying growth but numerous
consolidation opportunities. I won't dismiss the risk that this is a big
game of musical chairs, but I know that Wall Street can't help itself
when it comes to growth and XPO Logistics could have a great deal more
of that in store in the coming years.
Follow this link to the article:
XPO Logistics Sticking To Its Guns
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