Thursday, December 3, 2015

Seeking Alpha: Old Dominion's Operating Environment Has Shifted

Maybe the nicest thing I can say about Old Dominion's (NASDAQ:ODFL) performance since my last update on this leading less-than-truckload carrier is that even in a rough patch for trucking, the company has continued to do better than most of its peers. The shares are down about 20% over the past nine months, but ArcBest (NASDAQ:ARCB), Saia (NASDAQ:SAIA), and Roadrunner (NYSE:RRTS) have all done notably worse, with YRC Worldwide (NASDAQ:YRCW) the only notable outperformer excluding M&A.

My prior positive view on Old Dominion was predicated on a healthy economy and continuing excellence in operation, and only the second of those has really materialized. I continue to believe it is the best-run trucking company out there (at least in the LTL space), but a softer industrial economy, reduced truckload spillover, and changing shipping patterns are creating notable headwinds. Although I believe the shares are trading at an interesting valuation today, the Street will likely want to see weight trends and economic activity improve before getting significantly more bullish.

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Old Dominion's Operating Environment Has Shifted

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