Forget its top-level performance in the less-than-truckload (or LTL) sector, Old Dominion (ODFL)
is one of the better-run companies I've followed for the past
decade-plus. Management sticks to what it does best, doesn't jeopardize
the model just to please Wall Street in the short term, and continues to
build the business for further growth. The only issue with that
top-level performance is that it is no secret and Old Dominion's shares
are seldom cheap outside of those cyclical downturns where the outlook
for the sector is bleak.
Today is the opposite;
demand for freight is expanding and Old Dominion is once again
demonstrating that it can win share with service quality during such
expansions. The shares are already pricing in double-digit EBITDA
growth, and I think outperforming those expectations is going to be
difficult. While I'd be very slow to sell Old Dominion if I already
owned these shares, it's tough for me to argue for it as a buy at
today's valuation.
Click here for more:
Double-Digit Growth Continues To Propel Old Dominion
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