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XPO Logistics, Inc. Message Board

  • sofamors sofamors May 11, 2014 7:21 PM Flag

    Should see acq coming soon

    still think might be wheel clipper

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    • of course we will. that is the premise here. the issue is that the sum of all the parts is not making money. i don't understand how you can buy 20 PROFITABLE companies and not be reporting amazing PROFITS. YEs I think they will get to $2b or $7b or whatever the latest number is in rev, but can they make enough money to trade like CH Robinson. And if they can, what will be the share price if they trade at the same multiple as Robinson or HUB Group which are two profitable and established competitors. This is the issue for me. I can put a 15x multiple on XPO all day if they can show a profit but that will mean their share price is under $5 per share based on the current float. XPO is never going to get Amazon type multiples when they eventually turn a profit.

      • 1 Reply to ziippitty
      • ok I just did the quick calculation. Let's say XPO can manage a $10m real EBITDA in 2014. That means they will have a current multiple of 125x. HUB trades at 25x. CHRW at 22x. Hopefully we can agree that XPO will never reach margins significantly higher than the typical competitor, so we can expect a long term P/E multiple of say 25x on the top end and 15x on average. So when XPO matures and is solidly profitable like HUBG or CHRW then a realistic P/E is between 20x and 25x on the high end. This tells me that XPO today is a speculative momentum play. THere is nothing wrong with that as long as you catch the stock in the right direction. As it matures the LONG TERM expectation should be 20x to 25x. Good luck to all. Like I said, i got in low, sold along the way, and i am looking for new and better entry points as this thing matures.

42.18+0.21(+0.50%)Dec 26 4:02 PMEST

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