The third-party logistics (or 3PL) industry is huge,
with some estimates of the addressable opportunity ranging from $160
billion to $190 billion just in the United States. Radiant Logistics (NYSEMKT:RLGT)
isn't targeting all of that, or at least not yet, but the company's
operations in truck and intermodal brokerage and freight forwarding do
cover around one-half to two-thirds of the potential market. Radiant is
still a relatively small player in comparison to companies like C.H. Robinson (NASDAQ:CHRW), XPO (NYSEMKT:XPO), Landstar (NASDAQ:LSTR), and Echo (NASDAQ:ECHO),
but the company's growth-by-acquisition strategy has been used
successfully many times over in this space and its addressable markets
remain very fragmented.
At this point, it looks to
me like the Street may be too skeptical about Radiant. While there have
been recent challenges from soft demand and excess capacity, those
circumstances seem to be improving. Uncertainty about U.S. trade policy
is another risk factor, as is the possibility that the company will
overpay for future acquisitions and/or struggle to integrate them.
Recognizing those risks, I still believe there are meaningful
opportunities here as the business scales up, and I think the shares
look pretty interesting below $6/share.
Continue here:
Radiant Logistics Applying A Familiar Model To A Fragmented, Growing Sector
