In today’s content analysis, we discuss XPO Logistics Inc. (NYSE: XPO), one of the 10 largest global logistics companies based in the US. Even though XPO is considerably smaller than some of the leaders in the industry such as FedEx or UPS, they have been in full growth mode in the past couple of years, increasing their revenues from $150M in 2011 to an expected revenue of $15.5B for the full year 2016. This represents an annualized growth rate of 192% per year over the past 5 years. Download
Continuing with the economic performance, XPO’s performance spread and EPI have constantly increased in the last 3 years. Even though they’re not that high (0.8% and 1.11 respectively), the improving trend is definitely positive. The EVA went from negative to positive in 2014 and hasn’t stopped increasing since then.
This overall performance improvement positively affected the intrinsic value, which now sits above the stock price for the first time. With the stock trading around $34.00 and the intrinsic value sitting around $65.00, the potential upside is of more than 90%. The future growth value sends the same message; for the first time, the market price doesn’t reflect the full company’s value.
While issuing more shares and generating negative free cash-flows is usually seen as bad, it is not the case for XPO. The company has been growing tremendously over the past years and still has major growth plans in the books; the best way to reward investors is to invest all the cash they have available to fuel their growth.
XPO Logistics has been named the fastest-growing company in Fortune 500. Here is an overview of their recent growth activities. XPO made the acquisition of Con-way Inc. on 2015, which made them the second largest provider of less-than-truckload (LTL) services in North America, and helped them expand their global contract logistics platform. Other acquisitions by XPO include the ones of Norbert Dentressangle SA, Bridge Terminal Transport Services, Inc., and UX Specialized Logistics.
XPO Logistics Inc. (NYSE: XPO) is 1 of the 8 stocks featured in the article “How major U.S. delivery companies stack up for investors” that we wrote for The Globe and Mail.
This blog post has been written by Sebastian Carrillo, intern, under Jean-Didier Lapointe’s supervision.