I don’t use the word “unique” often, but Old Dominion (NASDAQ:ODFL) might qualify, as this company has built a finely tuned model that not only reliably gains market share in upturns, but produces operating ratios that other less-than-truckload (or LTL) truckers can’t touch. Part and parcel of that is a disciplined capex program that prioritizes modern equipment and incremental service center capacity growth, as well as ongoing investments in technologies that save labor, time, and money.
As was the case in my last write-up, I can’t say anything particularly constructive about valuation where Old Dominion is concerned. The stock has lagged the S&P 500, the industrial sector, and the Dow Jones Transportation average since my last write-up, but pull the comparisons out to a year or more and Old Dominion is pretty much in a class by itself.
The Goldman Sachs analyst covering Old Dominion recently tried to recast Old Dominion as a growth stock, which to me seems like the sort of thing you see near a top. Don’t get me wrong – Old Dominion is one of the best-run companies I follow, and I absolutely expect strong revenue and EBITDA growth over the next couple of years, but when you have to go greater lengths to explain a valuation/target price, there’s a message in that that shouldn’t be ignored.
Read the full article here:
Incredible Execution From Old Dominion Continuing To Support An Incredible Valuation
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