Old Dominion Operating At A High Level, But Some Concerning Signs Are Emerging

When I last wrote on Old Dominion (ODFL) in late December, I thought the share price was getting interesting, but wasn’t quite low enough to entice me to buy in ahead of what I believed would be a slower pace of growth in 2019 and 2020. While there are now some signs that slowdown is emerging, the shares are up about 25% since that article. So, let’s just say that earlier call of “not yet…” is not getting printed out and put on the fridge.

I continue to believe, as I’ve long believed, that Old Dominion is a best-of-breed that deserves a premium. I also believe that the ongoing expansion of online retailing is a positive for the less-than-truckload (or LTL) industry, even if Old Dominion itself isn’t all that weighted toward retail. Still, I’m concerned about a slowdown in short-cycle industrial markets in 2019 and 2020 and concerned that Old Dominion could face a one-two punch of more challenging tonnage and pricing. With that, I’m willing to miss out on further gains in Old Dominion shares rather than chase at today’s price.

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Old Dominion Operating At A High Level, But Some Concerning Signs Are Emerging